Opinion: The shift in risk appetite due to US recession expectations is the reason for the decline in US stocks and cryptocurrencies

BlockBeats News, On March 11, according to The Kobeissi Letter, the real reason for the market's decline was a sudden shift in risk appetite. In just a few days, the market went from extreme greed to extreme fear. The positioning is so polarized that market sentiment has shifted in the exact opposite direction. "Regardless of the fundamentals, sentiment is the ultimate driver of any market price." When sentiment shifts quickly, outflows hit record highs and trigger what we see as a "flash crash". The data shows that institutional capital exited tech stocks before they fell. Heading into 2025, hedge funds' holdings of the Magnificent 7 will fall to their lowest level in 22 months. In the last week of February, crypto funds saw a record weekly outflow of $2.6 billion. That's about $500 million higher than the record set in 2024.
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