The illusion of interest rate cuts has shattered, the AI bubble is shaking, and Bitcoin leads the fall: this round of big dump is not a black swan, but a systemic踩踏.

Original title: Global big dump, what exactly happened?

Original author: Liam, Deep Tide TechFlow

Original source:

Reprint: Daisy, Mars Finance

November 21, Black Friday.

US stocks plummeted, Hong Kong stocks fell sharply, A-shares declined simultaneously, Bitcoin briefly dropped below $86,000, and even the safe-haven gold continued to decline.

All risk assets seem to be pressed down by the same invisible hand, collapsing simultaneously.

This is not a crisis of a specific asset, but a systemic fall of the global market. What exactly happened?

Global big dump, everyone come to compare miseries.

After experiencing a “Black Monday”, the US stock market is facing another big dump.

The Nasdaq 100 index fell nearly 5% from its intraday high, ultimately closing down 2.4%, with the pullback from the record high set on October 29 expanding to 7.9%. Nvidia's stock price rose over 5% at one point before turning negative by the close, with the entire market evaporating 2 trillion dollars overnight.

The Hong Kong stocks and A-shares across the ocean were not spared.

The Hang Seng Index fell by 2.3%, and the Shanghai Composite Index broke below 3900 points, with a nearly 2% fall.

Of course, the worst has to be the cryptocurrency market.

Bitcoin falls below 86000 dollars, Ethereum falls below 2800 dollars, over 245,000 people liquidated 930 million dollars in 24 hours.

Since the high point of $126,000 in October, it has fallen and once dipped below $90,000. Bitcoin has not only erased all the gains made in 2025 but has also dropped 9% compared to the price at the beginning of the year, and a wave of panic is beginning to spread in the market.

What’s more terrifying is that gold, as a “hedge” against risk assets, also couldn’t hold up, falling 0.5% on November 21, hovering around $4000 per ounce.

Who is the culprit?

The Federal Reserve is the first to be affected.

In the past two months, the market has been immersed in expectations of “interest rate cuts in December”, but the sudden shift in attitude from the Federal Reserve felt like a bucket of cold water poured over all risk assets.

In recent speeches, several Federal Reserve officials rarely showed a collective hawkish stance: inflation is falling slowly, the labor market is resilient, and they do not rule out further tightening if necessary.

This is equivalent to telling the market:

“Interest rate cut in December? Thinking too much.”

CME “FedWatch” data confirms the speed of the emotional collapse:

A month ago, the probability of a rate cut was 93.7%, but now it has fallen to 42.9%.

The sudden collapse of expectations caused the US stock market and the crypto market to instantly go from KTV to ICU.

After the Federal Reserve burst the interest rate cut expectations, the market's primary focus is only on one company, NVIDIA.

NVIDIA delivered better-than-expected Q3 financial results, which should logically ignite tech stocks. However, such a “perfect” positive factor didn't last long and quickly turned negative, diving from a high position.

If good news doesn't lead to a rise, it is the biggest bad news.

Especially during the cycle of overvalued tech stocks, if favorable news no longer drives up stock prices, it instead becomes an opportunity to exit.

At this time, the big short seller Burry, who has been continuously shorting Nvidia, also added fuel to the fire.

Burry has continuously posted articles questioning the complex multi-billion dollar “circular financing” between Nvidia and AI companies such as OpenAI, Microsoft, and Oracle. He stated:

The real terminal demand is laughably small, and almost all customers are funded by their dealers.

Burry has previously issued multiple warnings about the AI bubble and compared the AI boom to the internet bubble.

Goldman Sachs partner John Flood bluntly stated in a report to clients that a single catalyst is not enough to explain this dramatic reversal.

He believes that the current market sentiment is battered, and investors have fully entered a profit and loss protection mode, overly focused on hedging risks.

Goldman Sachs' trading team summarized the current nine factors leading to the fall of the US stock market:

NVIDIA's bullish factors have all been exhausted

Despite exceeding expectations in the Q3 financial report, Nvidia's stock price failed to maintain its upward momentum. Goldman Sachs commented, “The real good news has not been rewarded, which is usually a bad sign,” indicating that the market had already priced in these positives.

Concerns about private lending intensify

Federal Reserve Governor Lisa Cook publicly warned about potential vulnerabilities in asset valuations within the private credit sector, and how their complex connections with the financial system could pose risks, raising market concerns, leading to an expansion of overnight credit market spreads.

The employment data failed to reassure.

The September non-farm payroll report was solid, but it lacked sufficient clarity to guide the Federal Reserve's interest rate decision in December, with only a slight increase in the likelihood of a rate cut, failing to effectively calm market concerns about the interest rate outlook.

Cryptocurrency crash transmission

Bitcoin fell below the psychological threshold of $90,000, triggering a broader sell-off of risk assets. Its drop even preceded the big dump in U.S. stocks, suggesting that the transmission of risk sentiment may have started in high-risk areas.

CTA big dump accelerates

Commodity Trading Advisor (CTA) funds had previously been in an extremely bullish position. As the market fell below short-term technical thresholds, CTA systematic selling began to accelerate, intensifying the selling pressure.

The Air Force re-enters

The reversal of market momentum has provided an opportunity for the bears, and short positions have begun to reactivate, pushing stock prices further down.

The overseas market performed poorly.

The weak performance of key Asian tech stocks (such as SK Hynix and SoftBank) failed to provide a positive external environment support for the US stock market.

Market liquidity has dried up

Goldman Sachs data shows that the liquidity of the top buy and sell orders in the S&P 500 index has significantly deteriorated, dropping far below the average level for the year. This zero liquidity situation makes the market's ability to absorb sell orders extremely poor, and even small-scale sell-offs can lead to significant fluctuations.

Macroeconomic trading dominates the market

The trading volume of exchange-traded funds (ETFs) has surged as a proportion of the total market turnover, indicating that market trading is increasingly driven by macro perspectives and passive funds rather than the fundamentals of individual stocks, exacerbating the overall downward momentum.

Is the bull market over?

To answer this question, it may be helpful to first take a look at the latest views of Ray Dalio, the founder of Bridgewater Associates, from Thursday.

He believes that although investments related to artificial intelligence (AI) are driving the market to form a bubble, investors do not need to rush to liquidate their positions.

The current market conditions are not exactly similar to the bubble peaks witnessed by investors in 1999 and 1929. Instead, based on some indicators he monitors, the US market is currently about 80% of that level.

This does not mean that investors should sell their stocks. “I want to reiterate that many things may still rise before the bubble bursts,” Dalio said.

In our view, the fall on 11.21 was not an unexpected “black swan” event, but rather a collective squeeze after a highly consistent expectation, which also exposed some key issues.

The real liquidity of the global market is very fragile.

Currently, “Technology + AI” has become a crowded track for global capital, and any small turning point can trigger a chain reaction.

In particular, an increasing number of quantitative trading strategies, ETFs, and passive funds are supporting market liquidity, which has also changed the market structure. The more automated trading strategies there are, the easier it is to form a “stampede in the same direction.”

So, in our opinion, this fall is essentially:

The “structural big dump” caused by automated trading and excessive capital congestion.

Moreover, an interesting phenomenon is that this fall was led by Bitcoin, marking the first time that cryptocurrency has truly entered the global asset pricing chain.

BTC and ETH are no longer fringe assets; they have become the thermometer of global risk assets and are at the forefront of sentiment.

Based on the above analysis, we believe that the market has not truly entered a bear market, but rather is in a stage of high volatility, and the market needs time to recalibrate the expectations of “growth + interest rates.”

The investment cycle of AI will not end immediately, but the era of “mindless growth” is over. The market will shift from expectation-driven to profit realization, both in the US stock market and the A-share market.

As the risk asset that fell the earliest, had the highest leverage, and the weakest liquidity during this round of falling cycle, cryptocurrencies experienced the biggest dump, but rebounds often appear first.