As the trade war escalates and severely impacts stock markets worldwide, S&P 500 futures plummeted by 22%, with investor panic soaring, making the market reminiscent of the financial crisis in March 2020. Consequently, hedge assets like cryptocurrencies and gold have also been affected, with a comprehensive sell-off leaving investors in a dilemma: "Is this a crisis or an opportunity?"
Financial media Kobeissi Letter pointed out that since the S&P 500 index reached its peak of 6,147 points a few months ago, US stocks have been declining for nearly 32 trading days, with a total drop of over 1,300 points, marking the most devastating crash since 2020.
The past three trading days saw a decline of up to 15%, indicating fragile investor confidence.
Originally, the market anticipated positive news about US-China trade agreements over the weekend, but received a completely different response. US President Trump not only failed to calm the market but instead reinforced his hardline stance, merely stating when facing the market collapse: "Sometimes you have to take medicine."
This news caused US stock futures to drop 6% at opening, further deepening concerns about long-term recession.
This morning, cryptocurrency market value evaporated 200 billion USD within five hours, and gold prices fell below the $3,000 per ounce mark.
This comprehensive sell-off demonstrates a complete market confidence collapse, with investors choosing cash as their only safe haven, and hedge tools proving ineffective during the financial storm.
According to the AAII sentiment survey, only 21.8% of investors are bullish, creating the third-lowest historical point, symbolizing pessimistic investor attitudes.
With the VIX volatility breaking last August's high point, the market is in an extremely unstable state, with the crisis expanding.
Last Friday morning, retail investors sold $1.5 billion in stocks within 2.5 hours, setting a historical single-period record. Simultaneously, institutional funds have stopped supporting the market, with March 2025 considered the most significant month of capital outflow in recent years.
Although bad news dominates the market, Kobeissi Letter believes recent negative information is largely reflected in stock prices. If positive trade agreement developments emerge, the market could see a rebound of over 5%.
A "healthy" market collapse requires a "relief rebound" to continue its development, especially when short trading has become too crowded, but this does not mean the market has reached its true bottom.
In summary, the future market fate still depends on whether Trump's tariff policy continues. If the policy remains tough, the economy may fall into a deep recession; if it can be eased, the current moment might be an excellent entry point, with potential turning points always emerging when no one is paying attention.
Risk Warning
Cryptocurrency investment carries high risks, and its price may fluctuate dramatically. You may lose all of your principal. Please carefully assess the risks.
