## Crypto Market Faces $300 Billion Loss as Bitcoin Decouples, Then Follows Stock Downturn
The cryptocurrency market has shed approximately $300 billion in value as Bitcoin navigates a period of uncertainty, initially diverging from US stock market trends before mirroring their recent declines. Concerns are mounting as large investors pull funds from Bitcoin exchange-traded funds (ETFs), and a US government shutdown adds to the volatile environment.
According to analysis from CryptoQuant, Bitcoin falling below its 365-day moving average – currently around $102,000 – could signal a deeper correction. ”If Bitcoin fails to bounce back above this range quickly, a much larger correction could follow,” the firm stated in a report released Wednesday.
While the Nasdaq 100 and S&P 500 remain near record highs,Bitcoin has experienced a roughly 20% drop from its October peak. Further indicating investor apprehension, interest in Bitcoin futures contracts has decreased by over $25 billion.
Despite this initial decoupling, analysts warn that Bitcoin continues to be susceptible to downturns in conventional markets. Tony sycamore of IG Australia explained, “When equity markets start to sell off, Bitcoin tends to follow. The correlation remains strong on the downside.”
The partial US government shutdown is also contributing to market instability, delaying the release of crucial economic data. This forces investors to rely on private sources for market assessment and risk evaluation.
Adding to the pressure, investors have withdrawn more than $2 billion from US “spot Bitcoin ETFs” over the past six days.These substantial outflows demonstrate a growing lack of confidence among institutional investors,who are prioritizing capital preservation amidst market volatility.
Timothy Egypt, research director at BRN Analytics, noted, “Continuous withdrawals show the caution of large investors, who are now focusing on protecting capital in a context marked by political tensions and financial uncertainty.”
Currently, there are no clear indicators of an imminent recovery for Bitcoin or the broader crypto market. Investor confidence remains fragile, and a failure to stabilize could lead to a prolonged period of losses.
