Author: Deep Tide TechFlow

U.S. Stocks: Day Four of War, Market Confidence Completely Collapsed

On Tuesday, Wall Street experienced another dismal trading day.

The Dow Jones plummeted 403 points (-0.83%) to close at 48,501 points, the S&P 500 fell 0.94% to 6,816 points, and the Nasdaq dropped 1.02% to close at 22,516 points.

But the numbers hardly reflect the day's heart-pounding events.

During the day, the Dow at one point plunged 1,200 points (-2.6%), the S&P 500 dropped as much as 2.5%, and the Nasdaq fell 2.7%, marking the most severe intraday sell-off since early February.

The market reacted like a startled bird; any little stir could trigger massive sell-offs. With the U.S.-Iran war entering its fourth day, Iran closed the Strait of Hormuz, causing oil prices to soar an additional 8%, and investor panic reached new highs.

The energy market is completely out of control.

WTI crude oil surged by $5.82 (+8.2%) to $77.05 per barrel, and Brent crude oil skyrocketed by $6.09 (+7.8%) to $83.83 per barrel.

This is the largest single-day increase since February. Even more alarming, oil prices have cumulatively risen over $17 since last Friday's $66, a nearly 26% increase.

The Strait of Hormuz—the chokepoint for 20% of the world's oil supply—remains effectively closed. Iran has not only blocked the strait but also begun attacking energy infrastructure across the Middle East, including oil fields and tankers in Saudi Arabia and the UAE.

On Tuesday afternoon, Trump issued a statement on Truth Social: "In any case, the U.S. will ensure that energy flows freely to the world." He promised that the U.S. Navy would escort tankers through the Strait of Hormuz.

This statement temporarily alleviated market panic—oil prices retreated from intraday highs, and the stock market narrowed its decline from 2.5% to around 1%.

But the situation remains grim: If oil prices stay above $80, inflation will spiral out of control, and expectations for Fed rate cuts will be completely dashed.

Tuesday was a true "bloodbath day" with all 11 sectors of the S&P 500 closing down, without any safe havens.

Hard-hit areas:

• The materials sector plummeted 4.5%, marking the largest single-day decline since April 2025. Lithium giant Albemarle fell 7%; copper miner Freeport-McMoRan dropped 4%; gold miner Newmont fell 7%.
• The industrial sector fell over 2%. Caterpillar dropped 3.98%, and Boeing fell 2.52%.
• Healthcare fell over 2%, and consumer goods fell over 2%.

The only bright spot: Target rose 3%, with Q4 earnings exceeding expectations, and the CEO stated "February sales rebounded strongly"; Best Buy surged 9%, despite a surprising drop in holiday season sales, but the Q1 outlook remains optimistic.

Tech stocks continued to collapse: Nvidia fell 1.3%; Tesla dropped 2.7%; software stocks were still being slaughtered, with MongoDB downgraded to neutral by Baird due to AI threats, down over 40% year-to-date.

The VIX volatility index soared to 25.16 on Tuesday, reaching its highest level since November of last year.

What does this number mean? The market expects severe fluctuations in stock prices over the next 30 days. A VIX above 25 is typically seen as the "panic" zone, and above 30 signifies "extreme panic."

More alarmingly, the market's expectations of the war's duration are worsening. On Tuesday morning, Trump warned: "This conflict may last four weeks."

Four weeks? That is much longer than the market's initial expectation of a "swift resolution in a few days." If the war does last a month, and oil prices break $100 per barrel, inflation could spiral out of control, and the Fed might not only refrain from cutting rates but could be forced to raise them—this would spell doom for the stock market.

Gold Plummets 4%: Dollar Strengthens, Safe-Haven Trades Reverse

Unexpectedly, gold plummeted on Tuesday.

Spot gold fell 3.7% in a single day, dropping from a high of $5,400 to about $5,148, marking the largest drop since a single-day decline of $600 on January 30.

Silver fared worse, plunging 6%. Platinum fell 10%, and palladium dropped 7%.

Why did safe-haven assets tumble? Because the dollar strengthened.

The dollar index surged on Tuesday, breaking through the 100 mark—this is its first time since May of last year. When the dollar strengthens, gold and silver priced in dollars decline.

Investors are flocking to the dollar—the ultimate safe-haven asset globally. In contrast, gold and silver, traditional safe-haven assets, have become "liquidity casualties": during market panic, investors tend to sell off any liquid assets for cash.

Cryptocurrency: Showing Resilience Amidst the Storm

This is the most surprising story of the day.

Amidst the plummet of U.S. stocks, the collapse of gold, and the surge of the VIX, Bitcoin actually displayed incredible resilience.

According to CoinGecko data, Bitcoin slightly rose to about $69,413 on Tuesday, with a 24-hour increase of +5.8%, completely reversing the drop in U.S. stocks.

Ethereum performed strongly as well, stabilizing around $2,000. Mainstream coins like Solana and Cardano performed steadily.

The total market capitalization of global cryptocurrencies stabilized at $2.41 trillion, with a slight 0.9% increase over 24 hours. The 24-hour trading volume reached $123 billion, indicating ample market liquidity.

Bitcoin's market cap reached $1.36 trillion, with a market share of 56.7%, indicating that in times of market turmoil, funds are concentrating towards Bitcoin, the "crypto safe haven."

Why is cryptocurrency so resilient?

This performance breaks traditional perceptions. In the past, whenever geopolitical crises erupted, cryptocurrencies always plummeted alongside tech stocks, as they were both viewed as "high-risk assets."

But this time is different. Several key factors support the crypto market:

The "digital gold" narrative is resurging.

The drop in gold actually makes Bitcoin's "digital gold" narrative more credible.

The problem with traditional gold is: it still depends on the strength of the dollar. When the dollar strengthens, gold necessarily declines, because it is priced in dollars.

But Bitcoin is different. Bitcoin is a true "borderless currency"—it does not rely on any single fiat currency for pricing and will not automatically depreciate when the dollar strengthens.

Amidst the turmoil in the Middle East and the accelerating narrative of de-dollarization, Bitcoin's characteristics are being reevaluated.

Long-term holders have stopped selling.

On-chain data shows that the selling by long-term holders (wallets holding for over 365 days) has essentially ended.

At the beginning of February, the rolling net selling by long-term holders peaked at 243,737 BTC. But by March 1, this number had sharply dropped to 31,967 BTC, an 87% decrease.

What does this mean? Panic selling has ended, and the market is bottoming out.

Miner selling pressure has eased.

Bitcoin miners' selling pressure has also significantly relieved. On February 8, the net selling volume of miners reached a peak of 4,718 BTC, but by March 1, it had fallen to 837 BTC.

Although the negative growth in computing power (with some mining machines shutting down) is concerning, analysts point out: miners are not surrendering, but rather diversifying strategically.

Whales are quietly accumulating.

Super whales holding 100,000 - 1,000,000 BTC increased their holdings by about 14,000 BTC between February 19-20, and have not sold since.

Small whales holding 1,000 - 10,000 BTC began accumulating from February 25, increasing their positions from 4.22 million BTC to 4.23 million BTC.

Smart money is buying in reverse.

Amidst the pessimism, Fundstrat's star analyst Tom Lee provided an optimistic forecast.

On Wednesday, Lee stated in a CNBC interview: "The worst of the sell-off will occur this week. I expect March to be a 'month of gains' for the stock market."

Lee also added on social media: "We understand that the war headlines make investors anxious, but we expect the stock market to rise in March: led by MAG7, software stocks, and cryptocurrencies (BTC, ETH)."

Lee's logic is: cryptocurrencies and tech stocks have already undergone significant corrections and may currently be in the "final bottoming phase," which will lead to a "rally in April."

Historical data supports Lee's view. Data from Wells Fargo shows: the S&P 500 typically rebounds within two weeks after significant geopolitical conflict, rising on average by 1% three months later.

Bitcoin Technical Analysis: $65,000 is Key

Currently, Bitcoin is fluctuating in the range of $65,000 - $68,000.

Key support levels:

• $65,000: If it breaks below, it could trigger a wave of selling, dipping to $64,600 or even $64,000
• $63,000: Absolute bottom line, dropping below it points to $60,000

Key resistance levels:

• $68,000: Has been tested multiple times; breaking through could trigger FOMO
• $70,000: Psychological barrier; breaking above could lead to $74,000 - $75,000

Technical analyst Michael Van De Poppe stated: "Bitcoin must hold above $65,000. Once it does, it's only a matter of time before it attacks above $70,000."

Key Question: How Long Can the War Last?

The market is currently only concerned with one question: How long will the war last?

Trump warned on Tuesday: "This conflict may last four weeks."

If it truly lasts four weeks: oil prices will break $100, inflation will spiral out of control, and the Fed may be forced to raise rates, leading to even larger drops in the stock market.

If it's only a few days: oil prices will retreat, inflation will ease, the stock market will recover, and cryptocurrencies may follow suit.

Fundstrat's Tom Lee is betting on the latter: "The worst of the sell-off will end this week, and March will be a month of gains."

Legendary investor Steve Eisman said last week: "I won't change any of my trades because of this conflict."

But the market clearly doesn't think so.

The VIX has surged, the materials sector has plummeted, and gold has collapsed—all signals from the market shouting: "We are scared!"

The only exception is cryptocurrency.

Bitcoin has surprisingly shown resilience amidst the plummet of stock markets and the collapse of gold. This is a signal: the crypto market is maturing, evolving from a "pure risk asset" to an "alternative safe-haven asset."

Fear index at 10, long-term holders have stopped selling, whales are quietly accumulating, all historical data points to the same conclusion: bottoming is in progress.

As for whether it can rebound to over $70,000 in March?

The answer will be revealed in the coming days.