2025-12-26 03:20:14

The linkage between the crypto market and traditional finance is not constant. Under special circumstances, this correlation can directly fail, or even show completely opposite trends. Understanding these patterns can help you avoid risks and seize opportunities during "independent market movements."

**Three Major Scenarios of Correlation Failure**

The decoupling of the crypto market from traditional finance mainly occurs in three situations: First, when significant positive or negative news impacts the crypto industry; second, when there are localized risks in traditional financial markets; third, when the crypto market is in an extreme bubble or undervalued zone. In these cases, the endogenous logic of the crypto market can override the influence of traditional finance, forming an independent trend.

**Case 1: Major Positive Breakthrough in the Crypto Industry**

In January 2024, the approval of Bitcoin spot ETFs marked a milestone for the crypto industry. At the same time, traditional finance markets fell due to inflation data exceeding expectations, with the S&P 500 dropping 2%. However, Bitcoin rose by 10%, completely breaking the correlation. The reason is that ETF approval brought approximately 20 billion in incremental capital to the market, enough to offset the selling pressure from traditional finance, driving prices independently higher.

**Case 2: Spillover Effect of Localized Risks in Traditional Finance**

In March 2023, during the initial phase of the Silicon Valley Bank collapse, both markets declined simultaneously (Bitcoin down 8%, S&P 500 down 1.8%). But afterward, as traditional finance continued to adjust deeply, the crypto market rebounded due to regulators clarifying security standards for crypto asset custody. This indicates that improved market expectations regarding the security of crypto assets can offset risk panic.

Understanding these decoupling mechanisms allows for clearer judgment at critical moments.

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HodlVeteran

· 8h ago

Laozi was severely affected by this kind of "decoupling" back in 2018. He thought that having an independent market meant going all-in, but it crashed together... Only now does he realize that decoupling is real, but making money isn't that easy.

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NotSatoshi

· 8h ago

Decoupling is really something that can either save lives or cause deaths, it all depends on how quickly you react. I missed out on that wave of ETFs, and looking back now, I still feel a bit regretful. The Silicon Valley Bank incident was truly memorable; it was really chaotic at the time, and information was also confusing. This logic sounds good, but the actual implementation is a different challenge. Wait, based on this theory, can buying at the bottom of the bubble make a profit? Or is the extreme undervaluation the real entry point? Decoupling indeed exists, but how do you know when it will happen? That’s the tricky part. It feels like armchair quarterbacking again.

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ChainSherlockGirl

· 8h ago

Data shows that decoupling often signals that big players are getting on board. Based on my analysis, during that ETF wave, some wallet addresses were quietly accumulating. Regarding the rebound after Silicon Valley Bank's decline, I observed a shift in regulatory expectations—it's interesting that the market reaction is always half a beat ahead of official statements. Just my personal speculation, the next decoupling might happen faster than we imagine. Really? Mastering this logic is like holding the market's rhythm chart. If I were to give a risk warning, the volatility during decoupling can wipe out your annual returns. To be continued.

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MysteryBoxOpener

· 8h ago

The decoupling of the market is quite insightful, but I'm just worried that most people still chase the highs and sell the lows, and simply can't grasp those independent opportunities. That wave of ETFs really caught me off guard; I was still debating whether to add to my position, and it already skyrocketed. I remember clearly the Silicon Valley Bank incident; everyone was panicking, but it turned out to be a good time to get in. This kind of contrarian thinking can indeed save your life. The key is having the mental resilience not to collapse in extreme market conditions. To put it simply, don't just focus on the S&P; crypto has its own logic. Learning to read signals is the real skill to make money. Decoupling markets test human nature the most; greed makes it easiest to lose money. What I'm most afraid of now is this situation that seems like decoupling but isn't really, the most tricky one.

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