Recently, the cryptocurrency market has experienced a severe turbulence, with Bitcoin and Ethereum consecutively falling below key support levels, transforming the market from slight fluctuations to significant declines. This phenomenon has sparked extensive discussion among market participants about what factors led to this drastic market volatility.

Analysis indicates that there is a significant divergence in market expectations between institutional investors and retail investors. Major financial institutions on Wall Street have begun to adopt a cautious stance and reduce their risk exposure. Institutions such as Barclays, Bank of America, and Morgan Stanley have issued warnings that the market may be underestimating the Federal Reserve's hawkish position. Goldman Sachs has even advised clients to hedge against the possibility of the Federal Reserve not lowering interest rates in September. These actions suggest that institutional investors are preparing for the worst-case scenario.

In contrast, retail investors remain optimistic. CME tools indicate that the expected probability of a rate cut in September driven by retail funds once soared to over 90%. Data from Bank of America also shows a significant influx of funds into U.S. stock funds and the encryption market in the short term. This opposing situation of institutions reducing positions while retail investors increase theirs has laid the groundwork for subsequent market volatility.

The gap between market expectations and economic reality has become the trigger for this market adjustment. The latest economic data shows that the inflation problem remains stubborn, with the core CPI and 'super core inflation' indicators rising month-on-month in July. The job market remains robust, with the unemployment rate staying below 4% and wage growth exceeding 4%. Additionally, the impact of new tariffs on Chinese goods has yet to be fully realized, which may further drive up prices in the coming months. These factors have led the market to begin questioning the possibility of a rate cut in September, and the disconnect between expectation and reality has been rapidly amplified in the cryptocurrency market.

This market adjustment reflects the need for investors to evaluate economic data and policy directions more rationally. For cryptocurrency investors, closely monitoring macroeconomic indicators and regulatory trends, while maintaining moderate risk management, will be key to coping with market volatility. In the future, the market may continue to seek a balance between economic data, policy expectations, and investment sentiment. Investors should remain vigilant and prepare adequate risk prevention.