2025-12-31 00:23:38

The financial markets in December showed two completely opposite scenes. U.S. stocks, driven by the "Christmas rally" at the end of the year, saw the Dow Jones and Nasdaq indices repeatedly hitting new highs, with optimism in traditional markets spreading across Wall Street. In stark contrast, the crypto market has fallen into stagnation—Bitcoin has been oscillating around $85,000, lacking any significant upward momentum. If this divergence continues to evolve, it could lead to more unexpected variables in the future.

Historically, a December rally in U.S. stocks usually drags crypto assets along for the ride. However, this time, an exception has occurred. There are two key issues behind this.

First, the misallocation of funds. The recent rise in U.S. stocks is mainly driven by expectations of Federal Reserve rate cuts and strong earnings reports from tech companies, with incremental funds flowing into traditional markets. In contrast, in the crypto space, Bitcoin spot ETFs have experienced net outflows for five consecutive weeks, with institutional investors clearly reducing their holdings. This stands in opposition to retail investors who still hold a bottom-fishing mentality.

Second, internal pressure of chips within the crypto circle. Data shows that long-term holders sold 815,000 Bitcoins in the past month, the highest level since 2024. These large holders chose to heavily sell when Bitcoin broke the $100,000 threshold, while new funds have not been flowing in, and the market is entirely sustained by existing capital, resulting in a one-way decline without rebounds.

More worth pondering is the hypothesis of Bitcoin's "independent market." Some believe that the crypto market should forge its own independent path, but data provides an answer—the correlation between Bitcoin and the Nasdaq index remains high at 0.8 in 2025. The problem is that this correlation has become distorted: Bitcoin reacts sluggishly when U.S. stocks rise, but declines more sharply when U.S. stocks fall. From this perspective, Bitcoin is more like a tail asset with higher risk coefficients within the U.S. stock system.

BTC-0,73%

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GasFeePhobia

· 22h ago

Long-term holders are directly selling 815,000 tokens with $100,000? Are they liquidating or what? Why does it seem like they are more eager than institutions?

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RugpullSurvivor

· 22h ago

Institutions are reducing their positions while retail investors are still bottom-fishing. This situation is quite desperate.

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CrashHotline

· 22h ago

Large investors sold 815,000 coins, retail investors are still dreaming of bottoming out, the gap is huge. Institutions are fleeing, are we still gambling? The US stock market is surging while Bitcoin is lying flat, it feels like everything is arranged clearly. With a correlation of 0.8, don't boast about independent market conditions; it's tied to the US stocks. Wait, large investors have already sold at 100,000, do you still dare to buy in? This time is different, no funds have actually come in. No one is buying the dip during this one-way decline? Have retail investors truly awakened this time? Five weeks of net outflow, how can anyone still call the bottom?

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FreeMinter

· 22h ago

Long-term holders sold off heavily when it reached $100,000, and only now are they realizing... That's why we've been constantly cut. Institutions are reducing their positions, while retail investors are still sleepwalking into bottom-fishing. The gap is really huge. What independence does Bitcoin have with a 0.8 correlation? Isn't it just a high-leverage version of US stocks? 81.5 million coins have been sold off. Where's the new money? The market is just relying on existing funds to play self-entertainment. Honestly, no one is willing to take the buy-in this round. Downward movement is just fate.

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