The Crypto Assets market has fallen again, influenced by multiple factors.

Recently, the Crypto Assets market has experienced a new round of fall, mainly influenced by the following factors:

1. The US stock market continues to be sluggish, especially with the weak performance of tech stocks.
2. A certain trading platform suffered a hacker attack, resulting in losses exceeding $1.4 billion in Crypto Assets, undermining market confidence.
3. Investor risk appetite decreases, and funds continue to flow out of Crypto Assets investment products.
4. The market lacks momentum, and the total market value of global Crypto Assets is difficult to break through resistance levels.

The performance of the US stock market drags down the Crypto Assets market

The major U.S. stock indices have recently shown poor performance, with both the Nasdaq and the S&P 500 experiencing a fall. Chinese concept stocks have plummeted significantly due to policy impacts, with the Nasdaq Golden Dragon China Index falling over 5%, and many popular Chinese concept stocks showing significant declines.

The latest developments in the field of artificial intelligence have also raised market concerns. Reports indicate that a major tech company may reduce its rental of data center computing power, reflecting worries about excessive investment in AI computing capabilities. Meanwhile, there are also concerns in the market regarding an upcoming financial report from a chip giant, including potential supply chain issues that new products may face.

Economists point out that the risks facing the US labor market are increasing. Factors such as slowing real income growth, worsening real estate market, and contraction of government spending may lead to a slowdown in economic growth, which has significant implications for financial market investors.

Ethereum Leads the Fall in Crypto Assets Market

The latest round of falls in the crypto assets market began on February 21 when a trading platform suffered a hacking incident. Ethereum led the decline, falling 11.5% within 24 hours, with a trading price dropping to $2,503.26. Other major crypto assets, such as Bitcoin and Solana, also experienced varying degrees of decline.

The derivatives market has seen a large amount of liquidations, intensifying market volatility. Over 300,000 traders were liquidated within 24 hours, with a total liquidation amount nearing $1 billion. Long positions dominated the liquidations, indicating that there may have been excessive leverage on the bullish side in the market previously.

Despite the market sentiment turning pessimistic, a certain options trading platform believes that the market reaction this time is relatively mild compared to the exchange collapse incident in 2022, reflecting the increasing maturity of the Crypto Assets industry.

Investor risk preference decreases

Crypto Assets investment products have experienced capital outflows for two consecutive weeks, reflecting a reduction in allocation to digital assets by institutional investors. Data shows that as of the week ending February 21, the total capital outflow exceeded $500 million, with Bitcoin seeing the largest outflow.

Analysts attribute the outflow of funds to multiple uncertainties, including trade tariffs, monetary policy, and inflation factors. Investors are awaiting important economic data such as the US Personal Consumption Expenditures (PCE) index to be released this week.

Currently, the market expects a high probability that the Federal Reserve will keep interest rates unchanged at the next two meetings, with probabilities of 97.5% in March and 73% in May. This indicates that the market's expectation for multiple rate cuts this year has diminished.

Crypto Assets market faces resistance above

From a technical perspective, the total market value of Crypto Assets is currently trading below the key supply area, with the Relative Strength Index (RSI) around 40, indicating that the market still leans towards a downward trend. If it falls below the support level of 3.03 trillion USD, it may trigger further selling.

A well-known analyst pointed out that the current Crypto Assets market is in a neutral state, with the fear and greed index at 40, and investors are cautiously weighing their decisions.

Analysis of Bitcoin's Short-term Trend

A co-founder of a trading platform stated on social media that many ETF holders are hedge funds, which profit by going long on ETFs and shorting futures. If the price of Bitcoin falls and the basis narrows, these funds may close their positions to take profits, and he expects Bitcoin could fall to $70,000.

Another macroeconomic trading expert believes that $95,000 remains a reasonable exit price relative to the potential trading prices over the next 6-12 months. He expects that the likelihood of Bitcoin reaching a new high in the next three months is relatively low, around 20%.