The TGA drawdown is here, can the crypto market withstand it?

The US Treasury is about to refill the TGA, which will withdraw several hundred billion dollars from the market all at once, and the troublesome part is that there aren't many buffering measures in place.

The Federal Reserve continues to reduce its balance sheet, RRP is nearing its bottom, and banks and overseas funds are not really stepping in, which is equivalent to directly taking money out of the market's pocket.

This is quite critical for the crypto market. The crypto market relies on liquidity; once money gets tight, the first to get hurt will be the highly volatile coins.

In 2021, when liquidity was abundant, stablecoins could still rise, and the market could keep playing happily.

But in 2023, as liquidity shrank, stablecoins decreased by tens of billions of dollars, and the market directly cooled off.

Now in 2025, liquidity is even tighter than it was back then. If stablecoins shrink further, assets with even greater volatility like $ETH may drop harder than $BTC.

So in my view, there are two key points to watch in the market going forward.

First, we need to see if new money comes in, such as ETFs or institutional funds, otherwise it will just be pure bloodletting.

Second, the positioning and rotation in the crypto market will be more critical; don't recklessly go all in, but choose your positions wisely.

As liquidity tightens, market funds become scarcer; at this point, it's not about who can run the fastest, but rather who can hold on.