Federal Reserve policy shift triggers multi-asset correction; future US stock market trends and cryptocurrencies face pressure

Recently, the major asset classes worldwide are facing collective adjustment pressures. Federal Reserve officials have repeatedly expressed hawkish stances, and market expectations for a rate cut in December have significantly fallen back to 43%. This shift in policy expectations has become a key factor triggering chain reactions. Meanwhile, concerns over overvaluation in Tech Stocks are increasing, and the attractiveness of AI concept stocks has noticeably diminished.

In this wave of adjustments, the three main asset classes—Gold, Bitcoin, and US stocks—have shown a rare synchronized decline. According to the latest data, Bitcoin’s price has fallen to around $87.32K, with a 24-hour decrease of 0.62%; Ethereum’s 24-hour decline has expanded to 0.98%. The Dow Jones Industrial Average has dropped over 1%, and gold prices continue to be under pressure, declining for several consecutive days.

Technical Warning Signs, Market May Enter Long-term Adjustment

From a technical perspective, warning signals are continuously emerging. The S&P 500, Dow Jones, and Nasdaq indices have all broken below the critical 50-day moving average support, which usually indicates that the short-term upward trend may have reversed. Bitcoin’s technical outlook is even more concerning—its 50-day moving average has crossed below the 200-day moving average, forming the common “death cross” pattern, which historically often signals further declines.

John Roque, Chief Technical Analyst at 22V Research, pointed out that the Nasdaq could continue its downward trend, with a potential decline of up to 8%. This forecast reflects a pessimistic attitude among technical investors regarding the future of US stocks.

Crypto Market Under Double Pressure

The difficulties faced by Bitcoin and Ethereum stem from a dual impact: weakening rate cut expectations and cooling AI enthusiasm. Jeff Mei, COO of BTSE, stated that as Tech Stocks’ valuations are questioned and the Federal Reserve’s rate cut prospects become uncertain, further declines in crypto assets are almost inevitable.

Analysis from Hex Trust suggests that if the US stock decline continues to expand, Bitcoin is highly likely to retest the psychological level of $70,000. This would mark a further significant retracement from recent highs.

Gold Faces Liquidity Pressure

The decline in gold is closely linked to the stock market. When investors experience losses in their stock holdings, they often sell gold to raise cash and cover losses. Michael Armbruster, Co-Founder of futures brokerage Altavest, predicts that in the short term, gold will fluctuate as investors seek liquidity, no longer playing its traditional role as a safe-haven asset.

Portfolio Strategy Recommendations to Manage Risks

At this sensitive moment, DoubleLine Capital CIO Jeffrey Gundlach has offered defensive advice. He pointed out that most asset prices are currently extremely overvalued and recommends that investors allocate about 20% of their portfolios to cash to prepare for potential major market corrections.

This advice reflects a cautious attitude among market professionals regarding the future of US stocks—although the long-term outlook remains to be seen, maintaining sufficient liquidity reserves in the short term will be a wise move to cope with market volatility.