The crypto market continues to struggle with low liquidity, hindering any potential recovery from its cyclical bear market status. A recent commentary by Garrett Jin, an agent representing a prominent '1011 Insider Whale', sheds light on this issue.
Jin points out that the ongoing conflict in the Middle East has had a surprisingly limited impact on the market. This is largely due to AI's influence on traditional risk pricing logic, which has significantly weakened the market's sensitivity to oil prices and geopolitical shocks.
Since ceasefire signals emerged, U.S. stocks have decoupled from energy shocks, with gains in chip and tech stocks offsetting the impact from the energy sector. However, this trend may not last, as AI sector valuations and crowded trade risks pose a significant threat to market stability.
The commentary also highlights that the liquidity turning point occurred last October, when more funds flowed into AI assets, causing a decline in the crypto market's performance. As such, any rebound in the market does not necessarily indicate the start of a new bull market.