Summary of Recent Market Bearish Signals: AI Bubble Dominates US Stock Market Volatility, Record ETF Outflows Exacerbate Market Sell-off, December Rate Cut Prospects Highly Uncertain

Following the news, Bitcoin has experienced continuous sell-offs since hitting a historical high on October 7, with the largest drop of over 35% in 46 days, nearly slipping below the $80,000 mark yesterday, leading the entire cryptocurrency market to bleed for several days in a row, now slightly rebounding to around $85,000.

In recent times, global financial markets have seen increased downside risks, with AI bubble arguments dominating the volatility of US stocks. The record government shutdown in the US has led to delays in the release of various important macroeconomic data, causing a sharp contraction in liquidity and significant fluctuations in the probability of a rate cut in December. The specific bearish signals are summarized as follows:

· Market doubts about NVIDIA's high receivables that cannot be collected, with cash conversion rates lower than industry peers. At the same time, funds of multiple AI companies are being used in a circular manner, with some transactions repeatedly counted as revenue. Several investment institutions have sold NVIDIA stocks, with the AI bubble suppressing the US stock market for a long time, leading to an overall market decline. Last night, a Fed official expressed optimism about AI, while NVIDIA's CEO clarified concerns about the AI bubble, leading to a rebound in US stocks;

· BlackRock's IBIT saw a record $523 million outflow on the 19th of this month, with a huge net outflow exceeding $2.5 billion this month, setting the highest record for consecutive trading days of market value evaporation in history. Analysts believe that retail investors selling spot Bitcoin and Ethereum ETFs are the main selling pressure on the cryptocurrency market, causing significant damage to native cryptocurrency users;

· The US government has just ended a record 43-day shutdown, during which several important economic and employment data were temporarily suspended. In September, non-farm employment unexpectedly increased by 119,000, with hawks at the Fed expressing continued concerns about inflation, leading to significant fluctuations in the probability of a rate cut in December. Over the past month, the initial rate cut probability of 70% (25 BP) has fallen to 30%, with traders at one point betting that there will be no rate cut in December. Early this morning, several Fed officials collectively turned dovish again, raising the rate cut probability to 71.3% (25 BP), reigniting rate cut speculation.

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