Market risk appetite has declined! In the early hours of February 4th, Beijing time, the three major US stock indices collectively fell, with the Nasdaq dropping over 1%. Technology stocks slumped across the board, with Micron Technology down more than 4%, and NVIDIA and Microsoft falling nearly 3%. The cryptocurrency market, which carries stronger speculative attributes, also plunged again. Bitcoin plummeted by 7% intraday, breaking below $73,000. At the time of writing, Bitcoin and Ethereum were down nearly 4%, while Solana fell over 5%. Data from Coinglass showed that in the past 24 hours, over $700 million in cryptocurrency contracts were liquidated across the network, affecting a staggering 169,800 traders. Major US tech stocks experienced a collective adjustment. On Tuesday, the three major US indices collectively plunged, with the Nasdaq's intraday decline exceeding 2% at one point, the S&P 500 dropping over 1.6%, and the Dow Jones falling more than 1%. By the close, the Nasdaq was down 1.43%, the S&P 500 fell 0.83%, and the Dow Jones declined 0.34%. Most major US technology stocks declined, with the Wind US Tech Giants Index dropping 1.62%. Individually, NVIDIA and Microsoft fell nearly 3%, Meta dropped over 2%, Amazon declined nearly 2%, Alphabet fell over 1%, Apple dipped 0.2%, while Tesla edged up 0.04%. Among other stocks, Micron Technology fell over 4%, while Oracle and Qualcomm dropped more than 3%. Additionally, software stocks continued their decline, with ServiceNow down 7% and Salesforce falling 6.85%. NVIDIA CEO Jensen Huang on Tuesday denied rumors of changes in the deal with OpenAI. In a media interview, he explicitly stated that the company's plan to invest in OpenAI is still "proceeding as planned," refuting recent market speculation about tensions between the two parties. He emphasized, "There is absolutely no controversy; these claims are pure nonsense... There is no drama whatsoever; everything is proceeding as planned... We are very happy to work with OpenAI." Huang further confirmed that NVIDIA will participate in OpenAI's next funding round, which he described as potentially the "largest private financing ever." Josh Brown, CEO of Ritholtz Wealth Management, commented, "I think we get one or two of these a year. The catalyst is always different, but the result is always the same – the most beloved trades from the preceding rally get absolutely crushed. Risk appetite is being pulled out of anything tech-related." Currently, US policy uncertainty remains high. The US Bureau of Labor Statistics (BLS) stated that the nonfarm payrolls report originally scheduled for Friday would be delayed due to a partial shutdown. BLS Deputy Commissioner Emily Liddell said in a statement, "The Employment Situation report for January 2026 will not be issued as scheduled on Friday, February 6th. The report will be rescheduled for release after government funding is restored." It is currently unclear whether the US Commerce Department will face report delays due to the impasse in Washington. This decision comes during a week packed with economic data releases, which was originally set to culminate with the nonfarm payrolls report. According to the CME FedWatch Tool, the probability of a 25-basis-point rate cut by the Fed in March is 8.9%, while the probability of holding rates steady is 91.1%. The probability of a cumulative 25-basis-point cut by April is 22.5%, holding steady is 76.0%, and a cumulative 50-basis-point cut is 1.5%. The probability of a cumulative 25-basis-point cut by June is 46%. Cryptocurrencies plunged across the board, with nearly 170,000 traders liquidated. As market risk appetite declined, the cryptocurrency market also plunged again. At the time of writing, Bitcoin fell 3.78% to $75,800, Ethereum dropped 3.88% to $2,260, Solana fell over 5%, XRP declined nearly 2%, while BNB and Cardano dropped over 1%. Bitcoin, the largest cryptocurrency by market cap, extended its downward trend over the past four months. On Tuesday, Bitcoin fell as much as 7% to $72,877, its lowest level since November 6, 2024, before recovering to around $76,000 by 3:35 PM New York time. Year-to-date, Bitcoin's cumulative decline has approached 14%. Data from Coinglass showed that in the past 24 hours, over $741 million in cryptocurrency contracts were liquidated across the network, affecting 169,800 traders. Of this, long position liquidations accounted for $538 million, while short position liquidations were $203 million. The largest single liquidation order occurred on HTX-ETH-USDT, valued at $8.4038 million. Bohan Jiang, Senior Derivatives Trader at FalconX, stated, "Many traders tried to buy the dip, betting Bitcoin could rebound above $80,000. But as Bitcoin continued to fall, a large number of these positions were forced to close, putting further pressure on the price." Bloomberg pointed out that despite the White House's friendly stance towards crypto and rapidly rising institutional adoption, Bitcoin has plunged approximately 40% since surging to its all-time high in early October last year. This sharp decline originated from a severe cascade of liquidations triggered by additional remarks from former President Trump about tariffs on October 10th last year, which wiped out $19 billion in leveraged token bets across the crypto market that day, from which it has yet to recover. Bitcoin's latest decline comes amid intense volatility across broader markets, particularly following a historic slump in precious metals over the weekend after a stunning rally. On Tuesday, the S&P 500 retreated from near record highs under selling pressure from tech stocks, while gold and silver rebounded, and oil prices surged due to rising geopolitical risks. For Bitcoin, the crypto derivatives market suggests further weakness may be possible, and there is currently a lack of clear positive catalysts. Augustine Fan, Partner at cryptocurrency options platform SignalPlus, said, "Sentiment in the cryptocurrency market has hit rock bottom. After more than a year of declining volatility, volatility has finally picked up as traders scramble for protection; the market is in a bearish phase, and the all-time high is now a distant memory." While some institutional holders remain steadfast, retail participation is waning as large long-term Bitcoin holders sell off assets worth tens of billions of dollars.
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