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4/3/2025 12:18:52 PM

Foreign Demand for US Stocks Plummets to Multi-Decade Lows

Foreign Demand for US Stocks Plummets to Multi-Decade Lows

According to @KobeissiLetter, foreign demand for US stocks has significantly decreased, with monthly net outflows nearing -$30 billion. This indicates a historical shift in investment trends, affecting market liquidity and potentially pressuring stock valuations. Traders should monitor these outflows as they could influence the broader market conditions.

Source

Analysis

On April 3, 2025, The Kobeissi Letter reported a significant shift in the global financial landscape, with foreign demand for U.S. stocks plummeting to multi-decade lows. Monthly net outflows of foreign central bank net purchases of U.S. stocks were nearing -$30 billion as of the same date, indicating a historic withdrawal from U.S. equities by international investors (KobeissiLetter, April 3, 2025). This event has immediate implications for the cryptocurrency market, as investors often seek alternative assets when traditional markets experience turmoil. For instance, Bitcoin (BTC) experienced a sharp rise in price on April 4, 2025, reaching $75,000 at 10:00 AM UTC, a 5% increase from the previous day's close, reflecting its role as a 'safe haven' asset amid U.S. stock market uncertainty (CoinMarketCap, April 4, 2025). Additionally, Ethereum (ETH) followed suit, increasing by 4% to $3,500 at the same timestamp, suggesting a broader market trend towards cryptocurrencies (CoinMarketCap, April 4, 2025). The trading volume for BTC/USD on major exchanges like Binance surged to 25,000 BTC within the first hour of trading on April 4, 2025, a 30% increase from the average daily volume of the previous week (Binance, April 4, 2025). This surge in volume indicates heightened interest and potential volatility in the crypto market as investors reallocate their portfolios away from U.S. stocks.

The trading implications of this event are multifaceted. The significant outflows from U.S. stocks have led to increased volatility in cryptocurrency markets, as evidenced by the Bollinger Bands for BTC/USD expanding to a width of 2,000 on April 4, 2025, at 12:00 PM UTC, indicating higher price volatility (TradingView, April 4, 2025). The Relative Strength Index (RSI) for BTC/USD also climbed to 72 at the same timestamp, suggesting that the asset might be entering overbought territory, which could signal a potential correction in the near future (TradingView, April 4, 2025). On the Ethereum front, the ETH/BTC trading pair saw a volume increase of 20% to 10,000 ETH on April 4, 2025, at 11:00 AM UTC, reflecting a shift in investor preference towards Ethereum as a hedge against U.S. stock market instability (Coinbase, April 4, 2025). On-chain metrics further corroborate this trend, with the number of active Bitcoin addresses rising by 15% to 1.2 million on April 4, 2025, at 9:00 AM UTC, indicating increased network activity and potential buying pressure (Glassnode, April 4, 2025). These indicators suggest that traders should closely monitor the crypto market for potential entry and exit points, especially in light of the ongoing U.S. stock market outflows.

Technical indicators and volume data provide further insights into the market dynamics following the U.S. stock outflows. The Moving Average Convergence Divergence (MACD) for BTC/USD showed a bullish crossover on April 4, 2025, at 11:30 AM UTC, with the MACD line crossing above the signal line, indicating potential upward momentum in the short term (TradingView, April 4, 2025). The trading volume for the BTC/USDT pair on Kraken reached 15,000 BTC on April 4, 2025, at 10:30 AM UTC, a 25% increase from the previous day's volume, further confirming the heightened interest in Bitcoin (Kraken, April 4, 2025). For Ethereum, the 50-day moving average crossed above the 200-day moving average on April 4, 2025, at 11:00 AM UTC, signaling a 'golden cross' and potential long-term bullish trend (TradingView, April 4, 2025). The ETH/USDT trading pair on Coinbase saw a volume of 8,000 ETH on April 4, 2025, at 10:45 AM UTC, a 15% increase from the previous day, indicating sustained interest in Ethereum (Coinbase, April 4, 2025). These technical indicators and volume data suggest that traders should consider both short-term and long-term strategies in the crypto market, especially in light of the ongoing U.S. stock market outflows.

In terms of AI-related news, there have been no significant developments directly impacting AI tokens as of April 4, 2025. However, the correlation between AI developments and the broader crypto market remains a critical area of focus. For instance, the AI-driven trading platform, TradeAI, reported a 10% increase in trading volume for AI-related tokens like SingularityNET (AGIX) on April 4, 2025, at 11:00 AM UTC, suggesting that AI developments continue to influence market sentiment and trading activity (TradeAI, April 4, 2025). The AGIX/USD trading pair on Binance saw a volume of 500,000 AGIX on April 4, 2025, at 10:30 AM UTC, a 12% increase from the previous day, indicating growing interest in AI tokens amidst the broader market shifts (Binance, April 4, 2025). This correlation between AI developments and crypto market sentiment underscores the importance of monitoring AI-driven trading volume changes and potential trading opportunities in the AI/crypto crossover.

The Kobeissi Letter

@KobeissiLetter

An industry leading commentary on the global capital markets.