The stock market shook off geopolitical concerns and another round of volatility triggered by the White House confrontation, rebounding in the turbulent late February. The three major US stock indices rose across the board, but failed to recoup the declines since early February, with Tesla surging 8% but still down 25% for the month. BTC briefly broke below the $80,000 level, hitting a low of $78,258, down more than 16% for the month. While MicroStrategy (now renamed Strategy) rebounded at the end of the month, it fell 24% for the month, outpacing BTC.
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ToggleUS stocks rebound after several twists and turns
The stock market began to rebound after several twists and turns. Due to the confrontational meeting between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy, the plan for the US and Ukraine to sign a mineral agreement was canceled. Meanwhile, Treasury Secretary Yellen said Mexico has proposed imposing the same tariffs on China as the US, and urged Canada to do the same, in order to create a "North American fortress" to fend off a flood of Chinese imports.
Against the backdrop of economic slowdown, geopolitics, trade wars, and AI valuation risks, market volatility intensified in February.
Adam Phillips of EP Wealth Advisors said: "This is a fragile market. There is clearly anxiety in market behavior, and we're hearing that anxiety from many of our clients. The market is currently struggling to find direction, but we're prepared for more volatility ahead as we await clear resolutions to a series of issues."
PCE rises moderately, consumer spending weak
The US January PCE price index rose 2.5% year-over-year, while the core PCE price index rose 0.3% month-over-month and 2.6% year-over-year, the smallest annual increase since early 2021.
Additionally, real consumer spending fell 0.5%, the largest single-month decline in nearly 4 years. The data indicates weak consumer spending, suggesting the economy may have entered a slowdown phase.
While further rate cuts may still take months, this report helps maintain the possibility of one or two rate cuts in 2025. Investors have overlooked the worrying decline in consumer spending and instead focused on the prospect of the Fed easing policy.
BTC briefly breaks below $80,000, nearly $900 million in liquidations across the network in 24 hours
The crypto market also experienced a turbulent month. The media outlet The Kobeissi Letter noted that since the escalation of trade war concerns in late January, the global cryptocurrency market capitalization has plummeted from $3.7 trillion to $2.8 trillion in just five weeks, wiping out over $800 billion in value.
(Crypto market collapse in the trade war: BTC ultimately cannot escape the fate of a risk asset)
BTC briefly broke below the $80,000 level, hitting a low of $78,258, down more than 16% for the month. In contrast to gold's steady rise this year, BTC has been highly correlated with risk assets, even declining more severely than the traditional stock market.
ETH hit a low of $2,076, down over 27% for the month.
According to Coinglass data, there were nearly $900 million in liquidations across the network in 24 hours, with BTC accounting for $430 million and ETH for $200 million.
Risk Warning
Cryptocurrency investments carry a high degree of risk, and their prices may fluctuate dramatically. You may lose your entire principal. Please carefully evaluate the risks.
