Bitcoin fell below $90,000 on Tuesday (November 18), marking the first time in 7 months that it dropped below this level and completely erasing its gains in 2025. This indicates that investors’ preference for risky assets is rapidly cooling amid uncertain interest rate outlooks and global market volatility. Asian stock markets are also under pressure, with tech stocks leading the drop in Japan and South Korea.
Ahead of the release of the US employment report and the earnings report of tech giant Nvidia, market confidence has become more fragile. Funds are shifting from high-risk assets to safe-haven instruments, and global stock market indices are hovering around a one-month low.
During Asian trading hours, Bitcoin dropped to around $89,953 in the afternoon, down about 2% for the day. The world’s largest cryptocurrency has seen a nearly 30% decline since retreating from its peak above $126,000 in October, with selling pressure in the market continuing to increase.
Ether, another major cryptocurrency, has also weakened, dropping nearly 40% since reaching a high of over $4,955 in August.
Market observers point out that investors’ expectations for the timing of future rate cuts in the US have wavered, coupled with global stock markets shifting towards volatility after a series of rebounds, putting increased selling pressure on cryptocurrencies.
Joshua Chu, co-chairman of the Hong Kong Web3 Association, told Reuters that some listed companies and institutions that significantly increased their positions during the uptrend have begun to exit, intensifying the chain reaction of market selling.
Some investors believe that cryptocurrencies could once again become leading indicators of market volatility. Earlier this year, before the major drop in US stocks in April, Bitcoin experienced a pullback, drawing external attention. The current sharp decline in cryptocurrencies has raised questions on whether it is also a leading indicator or could trigger a chain reaction spreading outward.
Matthew Dibb, Chief Investment Officer at Astronaut Capital, stated, “Overall, sentiment in the cryptocurrency market is quite bleak, continuing since the leveraged liquidation event in October.”
“The next technical support level is at $75,000, and if market volatility remains high, it may test that price level,” Dibb said.
The volatility is spreading to other risky assets, with the US stock market also sounding alarms. On Monday, the S&P 500 index fell by 0.92%, bringing its cumulative decline from the historical high on October 28 to 3.2%.
Last week, the S&P 500 index fell below its 50-day moving average, ending its second-longest streak of 139 consecutive trading days of strong performance this century. Some investors see this as a signal of a market turning bearish.
Analysts indicate that the number of stocks hitting new one-year lows has surpassed the number hitting new highs, indicating a weakening market internal structure. They worry that the latest downturn could expand into at least a 10% overall correction.
Global risk appetite is simultaneously declining. On Tuesday, the Nikkei 225 index dropped by 3.03%, the South Korean KOSPI composite index fell by 3.15%, the Taiwan Weighted Index dropped by 2.52%, the Hang Seng Index in Hong Kong declined by 2.01%, and the Shanghai Composite Index also fell by 1.06%.
US stock futures also show a weak trend, with both S&P 500 and Nasdaq 100 index futures leaning downward.
As risk sentiment weakens, funds are flowing back into safe-haven instruments, leading to a rise in bond prices. The US 10-year Treasury bond yield dropped by 3 basis points to 4.11%. The US dollar remained relatively stable.
Expectations for a rate cut by the Federal Reserve next month are gradually cooling. Generally, a lower interest rate would increase investors’ attraction to gold, but with the weakening rate cut expectations, gold prices have fallen for the fourth consecutive day, currently slightly above $4,000 per ounce.
Hebe Chen, an analyst at Melbourne-based Vantage Markets, told Bloomberg, “When market visibility sharply declines, widespread and uneasy sell-offs like this occur.”
She added, “From Bitcoin to recently surging tech stocks, funds are evacuating various risky assets, reflecting the market’s defense mechanism against ‘unknown unknowns.’ Volatility is likely to continue until visibility improves.”
Investors are now focusing on two key events: the upcoming Nvidia earnings report on Wednesday to observe if the artificial intelligence (AI) sector can support its high valuation, and the September employment report to be released on Thursday, which is expected to provide clues on the Federal Reserve’s policy outlook.
Homin Lee, Senior Macro Strategist at Swiss private bank Lombard Odier, told Bloomberg, “This tense sentiment will persist until more transparency is brought by the September employment report. If the employment data shows weakness in the labor market, or if Nvidia’s earnings significantly exceed expectations, it could help the market.”
Fed officials still have diverging views on the rate cut path. While some officials support a December rate cut citing weak employment data, according to the CME Group’s FedWatch Tool, traders currently predict only a 48.6% probability of a rate cut next month.