## Chain Reaction of Stock Market Plunge: Gold and Bitcoin Face Simultaneous Pressure

In mid-November, a rare triple-asset crash shook the global investment market. The Dow Jones Industrial Average fell over 1%, Bitcoin and Ethereum declined by more than 2%, and gold prices also faced continuous downward pressure. As of November 18, gold had dropped 0.4%, marking its fourth consecutive day of decline, while Bitcoin dipped to $91,107, hitting a nearly 7-month low. This is not an isolated event but a market resonance caused by multiple intertwined factors.

## Fed Hawkish Shift: Rate Cut Expectations Suddenly Disappear

The primary driver of the market adjustment stems from a shift in the Federal Reserve's policy signals. Officials have repeatedly issued hawkish remarks, leading to a sharp reduction in the market’s expectation of a 25 basis point rate cut in December to 43%—meaning more than half of market participants have given up hope for a rate cut. The delay in rate cuts directly undermines expectations of a low-interest-rate environment, weakening the appeal of gold as a traditional safe-haven asset.

## Rising Doubts About AI Bubble

Another pressure comes from a reassessment of the investment logic behind the tech industry. The market is increasingly wary of tech giants relying on massive debt to support capital expenditures—this "burning money first, monetizing later" business model is being questioned. Amazon's bond issuance cooling off exemplifies this shift. As the halo around AI fades, tech stocks in the US stock market are naturally facing correction, and Bitcoin, which is highly correlated with risk assets, is also affected.

## Technical Warning: Death Cross Signal Emerges

From a technical perspective, risk signals are quite clear. The S&P 500, Dow Jones, and Nasdaq all fell below their 50-day moving averages, which typically indicates a trend turning downward. Bitcoin's situation is even more severe—the 50-day moving average has crossed below the 200-day moving average, forming a "death cross," a technical pattern often signaling a major correction in history.

John Roque, Chief Technical Analyst at 22V Research, predicts that the Nasdaq could fall by as much as 8%. Jeff Mei, COO of BTSE, believes that with AI valuations being questioned and rate cut prospects uncertain, further declines in Bitcoin are "inevitable."

## Bitcoin Faces Second Testing Risk

Hex Trust analyst Quaglini issued a more cautionary warning: "This correction may not be over yet. If the stock market continues to decline, Bitcoin could easily retest the $70,000 low." This means there is still a risk of a 25% drop from the current $91,107 level.

## The "Paradox" of Gold and Stock Market Declines

The logic behind gold's decline contrasts with its traditional safe-haven function. Analysts point out that investors suffering losses in the stock market might liquidate gold holdings to offset losses, causing gold to move in tandem with other risk assets. Michael Armbruster, co-founder of futures broker Altavest, stated, "In the short term, as investors seek liquidity, gold may fluctuate in sync with other risk assets."

## Asset Overvaluation Warning: Cash Is King

Jeffrey Gundlach, Chief Investment Officer of DoubleLine Capital, issued a deeper warning to the entire market. He pointed out that many asset prices are extremely overvalued and recommended investors allocate about 20% of their portfolios to cash to hedge against significant market corrections. This advice reflects that even amid a triple-asset decline, the market could still face larger adjustments.

As gold, Bitcoin, and US stocks decline together, this is not just a short-term technical correction but potentially a systemic adjustment to the overly optimistic expectations of the past year.