This article first appeared on GuruFocus.
Bitcoin (BTC-USD) didn’t just slip below $90,000 it yanked global markets into a sharper downdraft, unsettling investors who were already uneasy ahead of Nvidia (NASDAQ:NVDA)’s earnings and shifting expectations for US rate cuts. The cryptocurrency fell as much as 2.8% before trimming part of the loss, but according to Fidelity International’s Joseph Zhang, the broader decline across assets over the past week could be tied to spillover from crypto. Some strategists warned that the drop may prompt retail traders to sell other holdings to meet margin calls, possibly turning isolated weakness into a wider feedback loop that drags down equities alongside digital assets.
Several analysts suggested this phase could be liquidity-driven, a view reinforced as Bitcoin steadied to a 1% loss by mid-morning in London while S&P 500 futures dipped 0.2%. AT Global Markets’ Nick Twidale said further downside could emerge as investors rebalance portfolios to offset equity losses, and Vantage Markets’ Hebe Chen argued that the depth of Bitcoin’s selloff has amplified the market’s risk sensitivity. That caution was already visible in Asia, where Japan’s Nikkei 225 closed down 3.2% and yields on 10-year government bonds rose to their highest since mid-2008, weighed in part by renewed concern over fiscal pressures and a diplomatic clash with China.
The broader worry is how tightly risk assets have been moving together. Cryptocurrencies and global equities have spent much of this year rallying in tandem as investors shifted away from trade-war fears and placed bets on innovation, but those hopes could be fading. Van Eck strategist Anna Wu said weakening US sentiment including traders reducing Nvidia positions ahead of earnings and key macro data has flowed into Asian markets. She added that if Bitcoin is treated as a proxy for market psychology, its latest move may be pointing toward a level of fear that investors typically associate with a bear-market mindset.
