The reason for the big dump of encryption has been found? A large amount of funds 'escaped to US bonds for hedging' and traders are heavily betting on big pump.

The U.S. Treasury market has recently experienced significant Fluctuation, with the 2-year and 10-year Treasury yields both falling to their lowest levels of the year. Due to signs of instability in U.S. economic data, coupled with increasing concerns about inflation and economic recession, market risk aversion has intensified, with a large amount of funds flowing into U.S. bonds, and traders also betting on a big pump. On February 24th, U.S. bond prices rose again, pushing the 2-year and 10-year Treasury yields to their lowest levels of the year. This Rebound is mainly due to the recent signs of instability in the U.S. economic data, reigniting market concerns about inflation and economic recession. Many investors are starting to shift funds to U.S. Treasury bonds to avoid higher-risk assets. At the end of the New York bond market on the 24th, the 2-year Treasury yield, which is more sensitive to Fed Intrerest Rate policy, fell 2.6 basis points to 4.166%, hitting a new low since December; the 10-year Treasury yield fell 2.8 basis points to 4.390%, the lowest since mid-December. The 30-year Treasury yield fell 2 basis points to 4.647%. Despite no major market-affecting data being released that day, weak economic data over the past week still had a considerable impact on the market. For example, on February 21st, S&P Global's preliminary U.S. Services Purchasing Managers' Index (PMI) was 49.7, falling below the critical point of 50, indicating that the U.S. service industry has entered a recession zone; the University of Michigan's February Consumer Confidence Index hit a new low since November 2023, with consumers full of concerns about future economic conditions and worried about a resurgence in inflation pressure. This weak economic data has made market sentiment more conservative, intensifying investor concerns about economic slowdown, while also focusing on this Friday's release of the Personal Consumption Expenditures Price Index (PCE) for the next judgment. Traders are making large bets on a rise in U.S. bond prices, with risk aversion increasing. According to Bloomberg, with the Rebound in U.S. bond prices, market risk aversion has become even stronger. Over the past week, U.S. bond prices have experienced a big pump, further pushing down yields, especially the 10-year U.S. Treasury yield, which fell from 4.57% to 4.28%. Many traders are starting to bet that economic slowdown will further depress yields and are shifting funds into U.S. Treasury bonds. Ian Lyngen, head of U.S. Intrerest Rate strategy at BMO Capital Markets, said: Concerns about the possibility of Trump imposing additional tariffs have made the global economic outlook even more uncertain, increasing market demand for risk aversion. Especially with Trump's recent hint of imposing more tariffs on imports from Canada and Mexico, this will further pressure the U.S. economy. At the same time, comments from U.S. Treasury Secretary Janet Yellen have also intensified bullish sentiment in the market. She said: With the implementation of Trump's policies, the 10-year U.S. Treasury yield should naturally decline, further increasing demand for U.S. Treasury bonds in the market. Derivatives market: bullish sentiment intensifies, expectations of Fed rate cuts rise In addition to the spot market, the derivatives market also shows strong bullish sentiment. Many futures traders have significantly increased long positions, with the market generally expecting the Fed to cut rates at the May meeting. According to the market, long positions in Federal Funds Intrerest Rate futures have risen by over 50% in the past week, reflecting higher expectations for future changes in Intrerest Rate policy. Currently, the probability of a rate cut in May in the futures market has reached 32%, a significant increase from 8% a week ago. The market generally expects the Fed to take a more dovish stance in the coming months, possibly further loosening monetary policy to address economic slowdown.