US stocks plummeted last night. The Nasdaq index fell 4% and fell by more than 5% at its lowest. Large technology stocks have dived sharply, such as Tesla falling more than 15%, Nvidia falling more than 5%, and listed companies related to the coin industry falling by more than 10%. For example, MSR fell 16.88%, and Conbase fell more than 17%.

Bitcoin fell below 0.077 million US dollars, Ethereum fell below 1,800 US dollars, altcoins were once again bloodwashed, and most altcoins once again hit new lows. Market sentiment was extremely panicked, and liquidity froze.

StareX exchange analysts believe that Bitcoin fell to around 0.075 million dollars, and Ethereum fell below $1,800, which is a short-term bottom. The reason is that Ethereum has experienced a large amount of capital liquidation, and altcoins are experiencing the largest altcoin liquidation since the LUNA crash in May 2022. The market has already liquidated about 10 billion dollars, which far exceeds the situation after the FTX collapse.

The emergence of a leverage explosion may mean that a phased bottom has arrived, ushering in an opportunity to break the bottom.

The crypto market has plummeted this time, and Trump's Bitcoin strategic reserves and the fulfillment of favorable expectations for the crypto summit are the apparent reason. More deeply, the market is generally concerned about the risk of a sharp drop in US stocks and a recession in the US economy. Institutions wait and see, market sentiment is extremely fearful, and liquidity is instantly frozen.

Trump promised to include Bitcoin in the country's strategic reserves during the election campaign and strongly supported the development of the crypto industry, once driving BTC to soar from $0.07 million to $0.11 million. However, from the current perspective, Trump's promises have been “fulfilled” in the strict sense of the word, but they are more at a verbal level, and the market has not welcomed a substantial inflow of capital as a result.

StareX exchange analysts believe that from a macro perspective, the crypto market currently lacks new potential benefits and ecological narratives, which is one of the key reasons why capital is afraid to enter the market. The greater risk is that institutional investors are extremely concerned about the trend of US stocks. Although the Federal Reserve has emphasized many times that the US economy is still strong, the market is clearly not buying it. Institutional investors have reduced their holdings due to safety concerns and chose to wait and see.

Currently, major US financial institutions mainly rely on ETFs for their BTC allocations, especially BlackRock and Fidelity. Recently, however, both institutions have shown a net outflow of funds. When the market was adjusted before, BlackRock's capital was still flowing in, but today's continued sales indicate that the agency is indeed leaving the market. Whether it's an ETF or super retail MSTR, bought like crazy when BTC rushed to 0.1 million dollars, but when the price fell back to 0.08 million dollars, the market almost fell silent, and few institutions were willing to take over even the cheaper chips.

The core issue that institutional funds are currently concerned about is whether the US economy will enter recession and whether US stocks will enter a bear market. The “Trump deal” has evolved into a “recession deal.” In an interview, Trump was asked if he expected a recession this year. In response, he said, “I hate predicting things like this. There's a transition period because we're working on a very big deal. We are bringing our wealth back to America, which is a big deal.” US Treasury Secretary Bezent also warned last week that the US economy may go through a difficult period during this economic transition.

Meanwhile, the crypto market's liquidity crisis has further intensified. Binance recently banned several market maker accounts because these accounts had net sales of millions of dollars in 24 hours without any buying action. Many project parties seem to only want to sell their chips as soon as possible; the price is no longer a factor for them. After all, for them, these chips have no cost, and any sale is pure profit. And retail investors are still the main players in the market.

StareX exchange analysts believe that the useless altcoins and MEME coins in the market should be kept away as much as possible. Only the leading altcoins on the racetrack may rebound in the future. As far as institutional capital is concerned, if the bear risk of US stocks is not lifted and the haze of economic recession does not dissipate, they will not rashly enter the market unless the market plummets to a relative bottom, but today's leverage explosion also contributed to a phased bottom.