#GlobalTechSell-OffHitsRiskAssets The global markets have entered a clear phase of "risk aversion" as the first week of February 2026 unfolds. What began as a reassessment of high-growth technology stocks has now evolved into a broad risk-off retreat, impacting cryptocurrencies, commodities, and emerging market equities. It is no longer an isolated sector correction — but a systematic repricing of growth, leverage, and future earnings expectations.

At the heart of this shift is rising concern over AI investment cycles. Recent breakthroughs in automation tools have altered investor perceptions. AI is no longer seen solely as a productivity catalyst; it is increasingly viewed as a disruptive force capable of consuming current software and service revenues. As a result, confidence in long-term revenue models has waned.
Adding to these fears is growing skepticism about massive capital expenditures directed toward AI infrastructure. With hundreds of billions allocated worldwide, markets are demanding near-term profitability and measurable returns. Companies unable to demonstrate clear revenue pathways are being heavily revalued, regardless of their technological leadership.
This revaluation has gone beyond Silicon Valley. With large-cap tech stocks influencing major indices, forced risk reductions and margin-driven liquidations are spreading across asset classes. Bitcoin has come under significant pressure, testing key psychological levels and trading at times below 50% of its October peak. Higher-risk assets like Ethereum, Solana, and BND have experienced sharper declines, with traders favoring liquidity over long-term exposure.
Commodities have not been immune. In an unusual development, silver experienced extreme volatility, while gold also declined significantly. Traditional safe-haven assets are being sold alongside risk assets, indicating margin calls and portfolio rebalancing rather than a simple shift toward safety. This "sell everything" dynamic is characteristic of late-stage deleveraging phases.
Regionally, market pressures have intensified. The KOSPI in South Korea has fallen sharply, while the Nasdaq and S&P 500 are facing their weakest momentum in months. The synchronized nature of these declines highlights the global nature of the current liquidity crunch.
Most importantly, this environment reflects a rotation, not a complete collapse. Capital is flowing out of crowded momentum trades — especially AI, software, and semiconductors — into defensive, cash, and low-volatility assets. However, the speed and scale of this rotation have created fragile market conditions where strong earnings reports are sometimes ignored in favor of concerns about forward guidance and discipline in spending.
In such "fragile" markets, price movements are driven more by positioning and risk management than fundamentals. Volatility increases, correlations rise, and liquidity becomes selective. These phases often appear chaotic, but they also pave the way for healthier market structures once leverage is reset.
For investors and traders, the priority now is capital preservation and structural awareness. Chasing rebounds in unstable conditions carries high risks. Focus should remain on liquidity trends, institutional positioning, and confirmation signals before re-engaging in aggressive trading.
This is a market being reshaped — not a market in collapse.
Removing leverage causes pain.
Repricing creates opportunities.