Wall Street is undergoing a silent mass retreat. Just this week, data showed that US tech funds experienced the most severe sell-off in nearly a year—over $4 billion in funds fled in just one week. Only SOXX (semiconductor ETF) and VGT (tech ETF) saw outflows of over $2 billion each.
Don't be fooled by the superficial prosperity of the market. Although overall US stocks are still seeing inflows, money is wildly fleeing from the 'crowded' tech stocks and shifting towards traditional sectors. This is not just about taking profits; it's a defensive reallocation by institutions against the bursting of the AI bubble.
What does this mean for the crypto market? The bad news is, $BTC is still seen by Wall Street as a 'high beta tech stock.' The data is very honest: as tech stocks bleed, crypto funds also experienced an outflow of $1.7 billion this week, turning the capital flow negative year-to-date. Those who fantasized about 'U.S. stocks crashing while $BTC rises alone' should wake up now. In the current tightening of macro liquidity, correlation is a noose.
But crises often hide golden opportunities. The main funds are rotating sectors, and once the valuations of tech stocks return to rational levels, or $BTC can resist the decline while tech stocks continue to plunge, showing a true 'decoupling' signal, that will be the clarion call for bottom fishing.
The current strategy is very simple: keep an eye on the trends of NVDA and QQQ. If tech stocks continue to crash, the crypto market will likely roll around in this quagmire for a while longer.
May I ask all the brothers, in this wave of pullback, did you panic sell, or are you quietly placing orders to catch the falling knives? See you in the comments.
