#Gate广场圣诞送温暖

The global financial markets are in distress, with over 220,000 traders in the crypto space being liquidated. Could the $80,000 mark see a rebound?

On Thursday evening, following a fleeting rebound in US stocks, a sharp plunge occurred, plunging the global financial markets back into gloom. The cryptocurrency market "winter has arrived overnight." According to Coinglass data, over 220,000 traders were liquidated across the entire crypto network in 24 hours, with $814 million (approximately RMB 5.8 billion) wiped out. The major Chinese A-share index opened this morning below 3,900 points, with a maximum decline of over 2%. The "fear gauge" VIX, which measures expected US stock volatility, closed above 26, reaching a new high since April. So, what caused this financial crisis? How should we in the crypto world respond? Let’s hear the detailed analysis from Xiao Caishen:

👀 What is the reason behind the sharp decline?

👉 Nvidia’s AI bubble worries remain unresolved

Although Nvidia’s strong earnings report on Wednesday after hours initially seemed to alleviate some concerns about an AI bubble, last night’s market clearly proved that was all just an illusion. Some traders pointed out that the market is once again worried whether artificial intelligence projects can generate enough revenue or profit to justify huge technological investments. Arun Sai, a multi-asset strategist at Penta Asset Management, said that the market is still concerned about the overvaluation of chip manufacturers’ competitors and when the massive investments in AI infrastructure by large tech companies will start to yield significant returns. Kristina Hooper, Chief Market Strategist at Man Group, added that this unease had actually been spreading for weeks. Nvidia’s explosive earnings only temporarily eased these worries for a few hours. Matt Maley, Chief Market Strategist at Miller Tabak + Co. LLC, pointed out, “Is the profitability of AI truly reaching the level that the market has digested? That’s the key issue. Traders are worried whether current investments in AI will bring profits in five years. As a result, many are beginning to say, ‘I need to take profits to some extent first.’”

👉 The Federal Reserve’s hope for a rate cut by year-end remains slim

On Thursday, attention was also closely focused on the complex signals from the US employment data released before the US stock market opened. Despite the addition of 119,000 non-farm jobs in September exceeding analysts’ expectations, the unemployment rate rose from 4.3% to 4.4%, making the Fed’s rate cut expectations for December even more complicated. The latest Fed meeting minutes released this week revealed serious disagreements within the Federal Reserve over whether a rate cut is needed again this year, with hawks and doves holding different views. Fed Chair Jerome Powell previously warned that a December rate cut is not a certainty. According to the CME FedWatch tool, traders currently estimate a 40% probability of a rate cut in December.

👉 Geopolitical instability

Recently, tensions between China and Japan over the Taiwan issue have been tense, the Russia-Ukraine conflict has entered a deep-water phase, and Iran’s Islamic Revolutionary Guard Corps has claimed that conflict could erupt at any time, among other unstable events. These developments have heightened investors’ risk concerns, leading to capital outflows from speculative assets like Bitcoin, triggering sharp declines.

📈 What does the future hold for the crypto market?

Avoid rushing to buy the dip now; a break below $80,000 might lead to a rebound

Whether from the turbulence in international financial markets or the recent market sentiment in the crypto space, this round of decline is far from bottoming out; technically, after breaking below the 60-week moving average and entering a full bear market, Bitcoin remains in a downtrend. The candlestick charts show weak short-term momentum, with MACD continuing to decline, and moving averages displaying a bearish alignment. Although the Williams %R indicator has entered oversold territory, insufficient trading volume suggests a lack of buying support. Therefore, everyone should be cautious about buying the dip now, and stay rational—avoid shorting at low levels.

Of course, every decline will eventually end. While the short-term trend is bearish, oversold conditions could foster a rebound opportunity. Historical experience shows that when prices break through key integer levels (such as $80,000), technical buying may emerge. Significant volume increases, positive external policy signals (such as the US passing a crypto law), or triggering a phase rebound could all be catalysts.

📌 Trading advice: Stay cautious and avoid blindly shorting. In the short term, monitor support levels around $78,000–$80,000. If volume shows signs of stabilization and growth, consider a light position for a rebound. In the medium term, the market remains in a bear phase, and $80,000 may not be the bottom.