Market Fragmentation Under Circuit Breaker Risks: Why Is BTC Moving Against the Trend?

Tonight's market shows an interesting phenomenon—while US stocks plummeted due to economic weakness and the VIX soared to high levels, [$BTC](/zh-TC/trade/BTC_USDT?contentId=32562369583841) demonstrated resilience, breaking through previous resistance levels. To understand this divergence, we need to first grasp what circuit breakers are and why current macro signals are triggering completely opposite market sentiments.

**The Same Macro Signal, Two Completely Different Interpretations**

The fundamental trigger comes from Home Depot's earnings report—which revealed clear signs of slowing consumer activity and a slowdown in economic growth. For highly sensitive assets like Tech Stocks, bad news is bad news: the tech sector was already in a correction, and this data added fuel to the fire, putting pressure on stock prices.

But an intriguing reversal occurred—because economic outlooks weakened, market expectations for a rate cut in December [$ETH](/zh-TC/trade/ETH_USDT?contentId=32562369583841) surged rapidly, jumping from 50.4% to 52.6% within two hours. This seemingly small percentage change actually reflects traders' increased confidence in a shift in monetary policy.

**Why Do Rate Cut Expectations Boost Crypto Assets?**

A rate cut cycle generally implies abundant liquidity and revaluation of asset prices, which is a real positive for risk assets like [$BTC](/zh-TC/trade/BTC_USDT?contentId=32562369583841). When traditional financial markets become more certain about rate cuts, capital begins seeking alternative returns, and cryptocurrencies benefit due to their high risk-high reward profile.

In contrast, the logic for US stocks is exactly the opposite—although rate cuts can stimulate the economy, they presuppose that the economy is already in trouble. This "bad news spurring rate cut expectations" scenario often constitutes short-term bearishness for stocks.

**Circuit Breaker Mechanism and Risk Thresholds**

It’s important to be cautious: if the economy deteriorates further, US stocks could trigger circuit breaker levels of volatility. Circuit breakers refer to mechanisms that pause trading when stock market declines reach certain thresholds (usually 7%, 13%, 20%). Once US stocks hit a circuit breaker, the systemic risk spread often impacts all risk assets, including crypto markets, with [$SOL](/zh-TC/trade/SOL_USDT?contentId=32562369583841) and other high-beta coins being the most vulnerable.

**Where Is the Current Balance Point?**

The current situation is: during a soft landing, BTC benefits from rate cut expectations, while US stocks decline due to slowing growth—each side follows its own path. But if the economy experiences a hard landing and market panic escalates, this divergence will be ruthlessly corrected, and the resilience of the crypto market will be severely tested.

This is the duality of macroeconomics—identical economic data can trigger completely different reactions across markets, often beyond pre-judgment. In the short term, rate cut expectations support BTC; but in the long term, the stability of US stocks is the foundation for whether risk assets can continue their upward trajectory.