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HTX chief analyst Cloud said the recent drop in Bitcoin prices looks more like a normal correction after a rebound than a trend reversal.
Cloud said elevated U.S. Treasury yields are mainly a factor weighing on valuations, while their impact on overall liquidity remains limited, adding the funding structure and holding costs of the crypto market itself have not been impaired. Cloud said the latest decline appears closer to a temporary round of position unwinding ahead of key economic data releases.
Cloud also said the decoupling, or divergence, between Bitcoin and altcoins warrants caution. As marginal liquidity shrinks, capital tends to concentrate in the most established leading asset, Bitcoin, while altcoins face a lack of additional inflows to support them and are more vulnerable to sharper declines because of their higher leverage. Cloud expects that decoupling to persist until this week’s personal consumption expenditures data and nonfarm payrolls report are released.