The Federal Reserve's shift to hawkishness + Tech Stocks bubble anxiety, why are gold, Bitcoin, and US stocks moving down in sync?

A cross-asset "chain reaction" is unfolding. In mid-November, gold, cryptocurrencies, and the US stock market were all bound by the same string, falling together. The Dow Jones Industrial Average plummeted over 1%, gold prices are approaching the $4,000 support level, and Bitcoin and Ethereum both declined by over 2%. By November 18, the decline had not stopped—gold fell for the fourth consecutive day, down 0.4%; Bitcoin dropped to $91,107, hitting a nearly 7-month low.

**The real culprit is the Fed's hawkish turn**

The market's collective panic stems from two main factors. First, Fed officials have been "hawkish," and market expectations for a 25 bps rate cut in December have been cut in half to 43%. This means the previously relied-upon rate cut rescue script may no longer apply. Second, the business logic of Tech Stocks is being questioned—those tech giants relying on massive debt to support AI-related capital expenditures are facing rising financing costs, with Amazon's bond issuance cooling being a clear sign.

**Technical signals are already warning**

If fundamentals are the reason for the decline, technical signals are also indicating trouble. The S&P 500, Dow, and Nasdaq have all broken below their 50-day moving averages, typically signaling a trend shift from upward to downward. More alarmingly, Bitcoin's 50-day moving average has also crossed below its 200-day moving average, forming the well-known "death cross" in technical charts.

Technical analyst John Roque believes that the Nasdaq's decline is far from over, with potential losses expanding to 8%. BTSE Chief Operating Officer Jeff Mei bluntly states that under the dual pressures of AI valuation doubts and uncertain rate cut prospects, further downside for Bitcoin is inevitable.

**Gold trend: liquidity-driven anomalies**

The logic behind gold's decline deserves a separate analysis. When the stock market incurs losses, capital flows shift—investors start liquidating gold positions to offset losses in other assets. Altavest, a futures brokerage, believes that in the short term, gold will be highly synchronized with stocks, cryptocurrencies, and other risk assets, with liquidity demand being the dominant factor.

**Next steps: where are the tests?**

Quaglini from Hex Trust points out that this correction may just be beginning. If the stock market continues to weaken, Bitcoin could easily retest the $70,000 support level. Short-term volatility in gold may continue to rise until liquidity tensions ease.

Jeffrey Gundlach, Chief Investment Officer of DoubleLine Capital, offers a noteworthy suggestion: in an environment where asset prices are generally overvalued, portfolios should hold about 20% in cash to hedge against potential sharp pullbacks.

The movements of gold, Bitcoin prices, and US stock indices reflect a market shift from blind optimism to cautious conservatism.