### **Analysis of the reasons for the recent weak performance of altcoins**
The altcoin market has been sluggish recently, while Bitcoin has hit new highs. This sharp contrast has attracted widespread attention from the market. The following is an analysis of the reasons for the weak performance of altcoins from the perspective of macro and market liquidity.
---
### **1. Macro liquidity restrictions**
Liquidity is the core of driving market trends, and the current macroeconomic environment has imposed great restrictions on liquidity:
#### **1.1 Signal of Fed liquidity tightening**
- **Decline in reserves**: The key indicator of US dollar liquidity, the reserves of depository institutions of the Federal Reserve, showed a significant decline last week, interrupting the previous five consecutive weeks of growth. Reduced liquidity has limited the inflow of new funds into the crypto market.
- **Hawkish policy expectations**: Last Friday, Federal Reserve Chairman Powell made hawkish remarks, cooling the market's expectations for the Fed's interest rate cuts. The latest data shows that the probability of a rate cut in December has dropped to **55.7%**, and the outlook for loose funds is unclear.
#### **1.2 Stronger US dollar index**
- Since **September 30**, the US dollar index has rebounded strongly. The US dollar index is usually used as a reverse indicator of liquidity. A stronger dollar means tighter liquidity, and investors are more inclined to hold US dollar assets rather than high-risk assets such as altcoins.
---
### **2. On-site fund outflow**
In addition to macro liquidity pressure, on-site fund flows have also had a negative impact on the altcoin market:
#### **2.1 Huge fund outflow from CEX**
- Since **November 18**, major centralized exchanges (CEXs) have experienced fund outflows, especially Binance, with an outflow of nearly **US$2 billion**. Although some CEXs have achieved net inflows during this period, the overall net outflow of funds is obvious.
- The reasons for the fund outflow may include investors' profit-taking, uncertainty about the regulation of the crypto market, and large investors transferring funds to cold wallets.
#### **2.2 Bitcoin blood-sucking effect**
- Currently, Bitcoin is the main gathering place for market funds. Since **November 6**, the net inflow of US Bitcoin ETFs has exceeded **US$5.9 billion**, indicating that institutional investors' main focus is on Bitcoin.
- At the same time, retail investors are also pouring into the Bitcoin market. For example, Coinbase has been in the top ten of the U.S. Apple Store in terms of app downloads in the past 10 days, and new investors are choosing Bitcoin first.
Follow us and analyze the latest news
