Brothers, was the market at dawn too scary for you?
Nasdaq futures plummeted 1.6% in one minute, BTC followed with a 6% drop. The community is filled with cries of black swans and the impending bear market, with many retail investors panicking and cutting losses. But at the peak of the panic, I pressed the confirmation button to buy my entire position — this is not gambling, it's 3 data tables that have been hidden, telling me this is not a black swan, but a carefully orchestrated liquidity slaughter. Those who are cutting losses now are just handing over their bloody chips to others!
First table: Treasury withdrew 163 billion, market liquidity drained
The U.S. government has been shut down for 35 days, and the TGA account in the treasury is already empty. Last week, a big move was made—dumping $163 billion in short-term treasury bonds at once.
This operation is comparable to a super vampire; the market must immediately gather $163 billion in cash to take over. The active funds that originally circulated in the stock and crypto markets were forcibly pulled out overnight to fill the treasury bond gap.
BTC and the stock market are sensitive assets to funds. When funds are withdrawn, a price drop is just an inevitable result. It's like suddenly draining the water from a pond; no matter how strong the fish are, they will suffocate and jump around. It's not that the fish are failing; it's that the water is gone! This wave of decline has nothing to do with the intrinsic value of the assets; it's purely a man-made liquidity shortage.
Table two: A statement from the Fed has smashed the 70% easing expectation down to 45%.
More lethal than the withdrawal of funds is the collapse of expectations.
Just a few days ago, the market was still in a frenzy, with a widespread belief that the Fed would ease in December, with a probability as high as 70%. As a result, a casual comment from a Fed official stating that the future path is uncertain directly smashed this expectation down to 45%.
Most short-term funds in the crypto circle have added high leverage, betting on loose expectations. Once expectations reverse, these funds can only liquidate overnight to cut losses, leading to a massive sell-off that caused a flash crash in just one minute, resulting in a 6% drop in BTC.
This is not a natural market behavior; it is a precise blow aimed at high-leverage funds. It's like a group of people squeezed on a narrow bridge; when someone shouts that the bridge is going to collapse, everyone frantically escapes, causing a stampede, while in reality, the bridge hasn’t collapsed at all—only the panic has been amplified.
Table three: Interbank liquidity is in crisis, and active funds are doubly locked.
The most concealed danger signals are hidden in the data of the interbank market.
The scale of the Federal Reserve's emergency liquidity tools has surged to the highest point since the pandemic. What does this mean? Even borrowing money between banks has begun to become difficult. On the surface, the market appears to lack money, but in reality, the underlying currents are already surging.
Active funds need to buy the $163 billion treasury bonds from the Treasury while meeting the liquidity demands of the interbank market. The funds that can flow into the crypto market and stock market have already been squeezed to a minimum. Without funds to support, any slight disturbance will trigger a decline, but this type of liquidity shortage-driven drop can quickly recover as funds flow back in.
The core truth: This is not the beginning of a bear market, but a short-term liquidity shock.
So the truth behind this sharp drop is very clear: it is a combination of fiscal withdrawal + reversing expectations + hidden drought in the interbank market, three factors overlapping to cause a short-term liquidity shock. It is not a black swan, nor the beginning of a bear market.
History has proven countless times that liquidity-driven sharp declines, once funds flow back, rebounds will come quickly and fiercely. Retail investors who are panicking and cutting losses are essentially throwing bloody chips at the outlet of the fund siphon; when funds flow back and the market rebounds, they can only watch helplessly as others pick up the bargains.
The rules of the crypto market have always been that a sharp drop is always accompanied by a sharp rebound, especially for core assets like BTC. A short-term fund-driven decline never changes the long-term trend.
What should we do now? Remember these 3 points to accurately buy the dip without falling into traps.
Hold cash tightly: This is the only weapon for seizing cheap chips in the near future. Don't recklessly increase your position in panic; save your bullets for the best timing.
Focus on the core: BTC and ETH, these leading assets, will always be the first stop for funds to flow back in. Don't touch those small-cap altcoins; they have poor liquidity and are easily trapped.
Wait for signals: As long as one of the two signals appears, it’s the time to enter—either the government shutdown crisis is resolved, or the Fed issues dovish remarks.
In this designed game, those who survive and make money are never the ones who can run the fastest, but those who can see through the script and dare to act amid panic.
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