I woke up to my phone buzzing like it was the end of the world – and honestly, for a moment it felt that way.
Bitcoin had just flash-crashed more than three thousand points in the dead of night, futures were bleeding, and the entire risk complex looked like someone had pulled the plug. By the time most of Europe opened their trading screens, the damage was already brutal. What the hell just happened?
A Perfect Storm Hits Global Markets
Let’s be real – yesterday was one of those days that reminds you markets can turn on a dime. The S&P 500 staged its biggest intraday reversal since the chaos of early April, swinging from nearly +2% to closing down more than 1.5%. Nasdaq got absolutely hammered. And Bitcoin? It’s now down 35% from its peak and staring at its worst month since the great crypto purge of 2022.
All of this is unfolding right before the mother of all options expiries – roughly $3.1 trillion notional set to roll off today. When you mix that kind of gamma exposure with a sudden shift in rate-cut expectations and a crypto market that still runs partly on leverage and hopium, you get fireworks. Ugly ones.
Bitcoin Leads the Bloodbath
Crypto never sleeps, and last night it decided to scream. Bitcoin sliced straight through $85,000 and kept going, bottoming near $81,800 before bouncing a little. That’s the lowest level since April and a brutal 25% wipeout for November alone.
The usual suspects took it on the chin: MicroStrategy down another 3%, Coinbase slipping, mining stocks getting crushed. When Bitcoin decides to throw a tantrum, everything correlated feels the pain. And right now, correlation is painfully close to 1.
“This isn’t just profit-taking anymore. We’re seeing forced deleveraging across the board.”
– Veteran crypto macro trader
Tech Stocks Join the Party (Downward)
Remember when Nvidia was up 5% post-earnings and everyone declared the AI trade immortal? Yeah, that lasted about six hours. The chip giant closed down more than 3% and is slipping again pre-market. The entire Magnificent Seven looks mortal for the first time in months.
Asia got absolutely smoked overnight – Kospi down almost 4%, Taiwan and Hong Kong bleeding, Nikkei and the ASX deep in the red. Europe opened and immediately gave up a percent plus on the Stoxx 600. When the leaders fall this hard, there’s nowhere to hide.
The Fed Just Slammed the Door on December Cuts
Timing is everything, and the latest payroll revision couldn’t have landed at a worse moment. Several major banks – including some of the biggest names on the Street – scrapped their December rate-cut calls entirely. The probability collapsed from over 70% a week ago to barely above 25% now.
Higher for longer is back, baby. And when the market has spent months pricing aggressive easing while levering up on the Mag7 and crypto, a hawkish reset hurts. Treasury yields dipped a few basis points in the panic, but make no mistake: the bigger trend is still upward on the long end.
- Two-year yields sitting at the lowest in months? Flight to safety.
- Ten-year still above 4%? Growth and inflation reality check.
- Dollar ripping faces? King Dollar loves risk-off.
$3.1 Trillion Options Expiry – Today
Circle today on your calendar and write “volatility event” in red ink. We’re talking $1.7 trillion in S&P 500 options and another $725 billion in single-stock notional expiring. That’s the kind of size that can pin indexes, trigger gamma squeezes, or – as we’re seeing – amplify moves when sentiment flips.
Dealers are massively long gamma near current levels, which theoretically should dampen swings. But when the underlying mood turns sour fast, even gamma can’t save you from a waterfall.
Is the AI Bubble Finally Popping?
I’ve been saying for months that the concentration in AI names was getting absurd. Yesterday felt like the moment the music slowed down and people started looking for chairs.
Valuations were stretched, capex numbers were eye-watering, and the narrative was starting to sound a lot like “this time is different.” Markets hate those four words more than anything else.
“This is a rational selloff after the rally in tech stocks this year. It could go even further – the market’s not oversold yet.”
– Rory McPherson, CIO at a London-based discretionary manager
Geopolitics Throws Another Curveball
Just when you thought the macro backdrop couldn’t get more complicated, reports surface about a detailed 28-point peace plan for Ukraine that would involve major territorial concessions, a cap on military size, and no NATO membership. Oil immediately sniffed the potential for reduced supply risk and started sliding hard.
Brent is threatening the low 60s. That’s a massive move in energy markets and yet another deflationary impulse at exactly the wrong time for risk assets.
Where Do We Go From Here?
Look, I’m not here to call the bottom or the top. Anyone who tells you they know exactly what happens next is selling something.
What I do know is that sentiment flipped violently, leverage is getting unwound, and we’re heading into year-end with a lot of portfolios nursing serious wounds. The VIX is back above 27 – that’s not “buy the dip” territory yet, that’s “strap in” territory.
- Cash levels are probably about to rise fast.
- Defensive sectors that have been ignored for two years suddenly look interesting.
- Gold holding above $4,000 despite the dollar strength tells you something about real fear out there.
The November PMIs out today will give us another clue about global growth, and we still have plenty of Fed speakers on the docket. Any further hawkish commentary could easily push us toward testing the August lows.
On the flip side, oversold bounces can be vicious. If we get even a whiff of dovish pushback or some stabilization in crypto, the same leverage that’s killing us now could fuel a monster short squeeze.
Either way, the easy money phase of this bull market feels decisively over. Volatility is back, and it’s probably planning to stay for a while.
Buckle up. The next few weeks are going to be wild.
