#当前行情抄底还是观望？ Bitcoin! The crypto market intensifies its volatility: daily rebounds face setbacks again, is it bottoming out or continuing to explore lower levels?

The fluctuations in the cryptocurrency market have never stopped, especially after experiencing more than four months of continuous decline. Every rise and fall has been closely watched by investors worldwide. On Thursday, the crypto market experienced a new wave of decline, immediately cooling the optimism sparked by the unexpected strong rebound the day before. Bitcoin temporarily dropped 3.5% during the New York trading session, falling to $66,511, whereas just a day earlier, it approached the $70,000 mark, hitting the highest level since February 16. This fleeting rebound and subsequent correction are driven by a complex interplay of risk asset sentiment, policy expectations, and industry fundamentals. Some see this as a sign of a bottoming out, while others warn that the correction has only just begun. Is the crypto market in the process of bottoming or still exploring lower levels? Amid differing opinions, the market’s fog is gradually lifting.

Rebound hits resistance: after a day of rally, the crypto market declines again
On Wednesday, the cryptocurrency market saw a long-awaited strong rebound, with Bitcoin rising to $70,000, boosting the overall market sentiment and giving investors hope for a bottom—after all, this was the first significant rebound after over four months of decline. Coupled with the inflow of over $500 million on the day into US-listed Bitcoin ETFs, optimism spread quickly. However, this optimism was short-lived, as the market reversed on Thursday. Bitcoin fell as much as 3.5% during the day, dropping back to $66,511. Other major cryptocurrencies also declined, and the crypto industry and Digital Economy (CRPT) index weakened simultaneously, closing down 0.15% at $13.03, contrasting sharply with the previous day’s 7.32% gain.

Looking at recent trends, the crypto market’s volatility has become more intense. Since February, the Bitcoin ETF index has experienced multiple swings, with a single-day plunge of 13.54% on February 5 and a rebound of 10.24% on February 6, indicating a clear oscillation.

Notably, despite a $500 million net inflow into Bitcoin ETFs on Wednesday, the total net outflow for the year remains around $1.7 billion. This data reflects cautious market sentiment toward cryptocurrencies. The brief inflow did not alter the long-term outflow trend, indicating that this rebound lacked sufficient funding support, and the correction was not unexpected. Data analytics firm Kaiko’s research analyst Adam McCarthy stated, “I’m not very optimistic right now. During bear markets and periods of low liquidity, such rebounds are expected. As we see, this rally lacked enough support, so a pullback is not surprising.”

Linked to Tech Stocks: Nvidia’s Plunge and the Crypto Market’s Vulnerability
This correction in the crypto market is closely linked to the sentiment in the tech stock sector. For a long time, cryptocurrencies have followed the trend of tech stocks, especially those related to artificial intelligence and semiconductors. Nvidia’s sharp decline this Thursday has become a significant factor weighing on the crypto market.

As a tech stock bellwether, Nvidia reported strong earnings, but concerns about the sustainability of its large-scale AI investments caused its stock to plunge over 5.46% on Thursday, closing at $184.89, with a market cap evaporating over $240 billion.

In recent months, Nvidia’s stock has overall increased by 2.76%, but short-term volatility has intensified, with multiple days since February experiencing swings of more than 5%. The decline in tech stocks has directly transmitted to the cryptocurrency market. Currently, traders are pulling out of sectors vulnerable to AI disruptions, and cryptocurrencies, as high-risk assets, naturally become targets for capital withdrawal. The correlation between cryptocurrencies and tech stocks is not new. In recent years, as AI and blockchain technologies have become more deeply integrated, their market sentiments have increasingly aligned. Volatility in tech stocks often quickly reflects in the crypto market. Industry analysts note that the valuation logic of cryptocurrencies shares similarities with tech stocks, both relying on market risk appetite and liquidity. When tech stocks decline due to doubts about AI expenditure sustainability, market risk appetite drops, leading to capital exiting high-risk assets, and cryptocurrencies are no exception. This is one of the core reasons why Bitcoin’s rebound was blocked and it retreated again.

Multiple Stakeholders: Bottoming or Exploring Lows? Diverging Views
Faced with the turbulence in the crypto market, industry experts hold divergent opinions, with optimists and pessimists each asserting their views, engaging in a fierce debate over whether a bottom is forming.

The pessimists, represented by Matt Hougan, Chief Investment Officer of Bitwise Asset Management, believe that the end of the crypto winter is not marked by excitement but by indifference. “A single-day rally is exciting, but no one expects Bitcoin to jump straight back to $100,000. Bitcoin is in the process of bottoming out, and this process will take some time and be quite chaotic, possibly with even lower lows.” This view aligns with the current market oscillation—bottoming out is not an instant event, and it will involve repeated corrections.

On the other hand, the crypto bulls, like Tom Lee, are optimistic. He believes markets tend to bottom during “bad news,” and the recent impact of Citrini Research’s AI doomsday article suggests that a bottom has already formed. Tom Lee further states that the decline of the Mag 7 has “already completed about 95%,” and the sell-off in the software sector is “about 99% done,” implying that the correction in cryptocurrencies is in its “final weeks,” and the market is about to end its adjustment and rebound.

Besides differing industry opinions, the fundamental market conditions also appear “contradictory.” On one hand, Bitcoin earlier this month erased all gains since Trump’s re-election in November 2024—initially, the market was optimistic about more crypto-friendly policies under Trump’s second term, pushing Bitcoin to a record high of $126,000 last October. But subsequent large-scale sell-offs have kept digital assets under pressure ever since.

On the other hand, American Bitcoin Corp, a mining company supported by the Trump family, is also caught in the industry winter. The company, which once thrived during the crypto boom on Nasdaq, has now experienced its worst decline since 2022, with a loss of $59 million in Q4 and a market cap evaporating nearly 90%. Its stock price plunged multiple times, triggering temporary halts, reflecting the harsh reality of the crypto winter.

Signals of a Bottom? Underlying Infrastructure Not Collapsing, Only a “Confidence Crisis”
Despite the intensified turbulence and clear disagreements, a positive signal should not be overlooked: unlike previous crypto winters, the underlying infrastructure has not collapsed this time. Wall Street Journal analysis points out that although Bitcoin has experienced persistent selling, exchanges are operating normally, custodians are solvent, institutional buyers remain committed, Bitcoin ETF assets are held steadily, and free trading supply is decreasing.

Bain analyst comments that the current correction is not due to deteriorating fundamentals but merely a “confidence crisis.” Unlike the 2022 collapse, which saw exchange failures, custodian collapses, and massive capital flight, the industry’s underlying ecosystem remains stable, and institutional investors have not withdrawn en masse, providing crucial support for a bottoming process.

Data shows that although Bitcoin ETFs have experienced a net outflow of $1.7 billion this year, the $500 million net inflow on Wednesday indicates some funds are still deploying on dips. The cryptocurrency (US) index has fluctuated but overall trading volume remains stable, with a trading volume of $7.048 billion on February 20, showing no signs of large-scale capital exodus. These signals suggest that market panic is gradually easing, and confidence is slowly being restored. For ordinary investors, the most important thing now is to stay rational and avoid being swayed by short-term fluctuations. Whether it’s Hougan’s “bottoming process full of chaos” or Lee’s prediction of “final phase of correction,” both imply that the crypto market will remain volatile in the short term. Blindly chasing gains or panicking during declines is highly risky. Focusing on industry fundamentals and tracking institutional capital movements might be a more prudent approach.

In the long term, the development of cryptocurrencies remains closely tied to technological innovation and regulatory policies. The direction of the Trump administration’s crypto policies, the progress of AI and blockchain integration, and changes in global regulation will all influence the future of the market. This turbulence is both a release of market sentiment and a period of industry self-adjustment. The stability of the underlying infrastructure may well be the key foundation for the crypto market to emerge from winter and achieve long-term growth.