Last night’s decline was quite intense—none of the three major US stock indices held up, the Dow lost 0.8%, the S&P dropped 1.5%, and the Nasdaq fell even more sharply by over 2%. I thought Nvidia could support the market, and it surged to a 5% gain during the trading session, but ultimately couldn’t hold on and closed down 3%. As for the crypto world, it goes without saying—BTC directly broke through the $87,000 support level, dipping as low as $86,100; ETH, after breaking through 2800, tried to rebound but looked pretty weak in terms of momentum.

The logic behind this round of sharp decline is quite clear: BTC spot ETFs are experiencing continuous net outflows, closely tied to the US stock market. The current pattern is that whenever US markets open, BTC tends to plunge, with Asian session only providing minor corrections. The two have become fully synchronized “brothers in distress.” Plus, the Federal Reserve’s expectation of a rate cut in December has cooled off—probability has dropped to around 30%. With market liquidity tightening, high-risk assets naturally suffer.

What should retail investors do?

If heavily invested, take advantage of the rebound to reduce some positions and save some bullets; if the price breaks below key support levels, don’t hesitate to cut losses.

For dollar-cost averaging investors, consider entering in batches—target the $83,000 to $85,000 range for BTC, and watch ETH around 2700 to 2750.

Most importantly, keep a close eye on employment and inflation data before the Federal Reserve’s December meeting—less fuss, more observation.

Looking at the longer cycle, the halving effect of BTC and global capital flows are the decisive factors; they won’t always follow the US stock market closely. But in the short term, the trend is clear, and respect is still needed. Seasoned traders should seize the opportunity to pick up chips, while beginners shouldn’t rush to buy the dip and pay tuition—at this stage, US stock market sentiment and the Federal Reserve’s stance matter much more than candlestick charts.