The frenzy of the US stock market is a "midway break" for the cryptocurrency sector?

As the S&P 500 erases its December losses and heads towards 7000 points, with gold and silver both reaching new highs, everyone's attention seems to be drawn to the "Christmas market." But be aware — cryptocurrencies have pulled back after their surge. This is no coincidence, but a key signal: the excessive optimism in traditional markets may be quietly siphoning off the short-term liquidity from the crypto space.

Simply put, when US stocks and precious metals are wildly pursued due to "interest rate cut expectations" and the "2026 optimistic narrative," some institutions and large funds may temporarily withdraw from the more volatile crypto market to chase more "stable" trends. The VIX index falling below 15 indicates that panic sentiment has been extremely compressed — this is often not the beginning of a bull market but a sign of overheating in short-term speculation.

For crypto players, don’t be lulled into complacency by the illusion of a "fully prosperous market." If a large amount of capital continues to flow into traditional assets, the crypto market may enter a period of "low volatility bloodsucking," characterized by gradual declines or stagnation. Especially those altcoins that follow the trend of US stocks and AI concepts, once the funds retreat, the drop will be very sudden.

Real opportunities often brew when no one is watching. Suggestions: 1. Reduce leverage, especially avoid concept coins that are highly correlated with US stocks; 2. Pay attention to the narratives of cryptocurrencies themselves, as these will be the breakout points when funds flow back; 3. Keep ammunition; if the market experiences a panic adjustment due to liquidity shortages, that's when you should be greedy.

The carnival is for others, the rhythm is your own. Don’t forget what happened to global assets after the last round of US stock market gains ended in 2018.

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