The precious metals market has recently caused quite a stir. Gold plunged nearly $20 in one go and is now hovering around $4,354 per ounce, while silver fared even worse, dropping by 3% intraday. The culprit behind this is the CME once again raising the margin requirements for precious metals futures. It may seem like a matter of traditional finance, but the impact on the crypto market should not be underestimated.

This impact mainly spreads from three directions. First is the transmission of sentiment; at the end of the year, market liquidity is already tight, and when traditional safe-haven assets experience increased volatility, it can easily trigger panic across markets. Cryptocurrencies, due to their inherently high risk, are most susceptible to being caught in the crossfire. Second is the issue of capital reallocation; some institutional investors, in response to margin pressure on their precious metals positions, may be forced to liquidate their crypto holdings to cash out, which directly intensifies short-term selling pressure. Lastly is the correlation volatility; currently, the correlation between the crypto market and other risk assets is rising, making it easy to form a chain reaction of "precious metals decline, crypto follows."

But don’t be too pessimistic; the long-term impact is actually limited. By 2025, the cryptocurrency market has been reclassified as a high-risk asset, and its divergence from the safe-haven attributes of precious metals is already quite clear. This wave of volatility is essentially a short-term liquidity shock, not a sign of a trend reversal. Instead of blindly following the trend, it’s better to focus on two key indicators: the performance of BTC’s critical support levels and the capital flow of ETFs. These are the real keys to judging the future market direction.