Barclays Strategist Says the Crypto Selloff Is Only in the 7th Inning

Barclays is waving the caution flag, and crypto is already feeling the draft. Alexander Altmann, the bank's global head of equity tactical strategies, says the recent rebound in US equities doesn't have the bones to hold up — and that digital assets are stuck in the same undertow. His read: we're at the top of the seventh inning of this selloff, a framing relayed in a post from Bloomberg's Joe Weisenthal.

The evidence Altmann points to isn't subtle. Market breadth is negative, growth stocks are mediocre, the bounce in neoclouds — the AI compute-hosting outfits — is modest, crypto is down, and the quality factor sits flat. Put together, that's a rally running on fumes rather than structure.

The mechanical risk is what should worry traders. According to Barclays projections cited by Bloomberg, volatility-controlled systematic funds could dump up to $135 billion in US index futures within 24 to 48 hours after a sharp volatility spike. That kind of forced selling doesn't stay contained — equity indices and digital assets have been moving as one during liquidity crunches, and heavy derivatives selling drains institutional capital, kicking off liquidations across crypto.

Barclays ties the whole warning back to AI, the engine behind the equity run of recent quarters. Speaking on Bloomberg's Odd Lots podcast on October 29, Altmann said plenty of market participants are still in denial about tech overvaluation. He flagged capitalization strain among neoclouds, where trouble lining up steady financing is showing up as early margin friction.

Meanwhile, the crypto trading floor is getting quieter. Barclays' 2026 outlook reports project spot trading volumes will keep sliding without an immediate institutional catalyst. Bitcoin and major altcoins remain exposed to leveraged liquidations and ETF outflows — and those net outflows have tracked the Wall Street correction step for step.

Add one more sour note: analysts are increasingly skeptical that the US midterm elections will deliver anything fast. Barclays expects legislative wins for markets to face real delays, and the regulatory pieces still in play — the CLARITY Act and frameworks for real-world asset tokenization — are stuck in debate in Washington, with committee hearings set before the fiscal quarter closes.