This wave of decline has left many people scratching their heads, but there is actually a deeper logic behind it. If you don't understand these, you'll always be teetering on the edge of losing money.
Let's start with the first layer of reasons—the U.S. Treasury auction, this 'blood-drawing machine.' Now that the U.S. government is in a shutdown, the Treasury General Account (TGA) resembles a dried-up pond, and market funds are already tight. Although the Federal Reserve is increasing capital injections on the banking side, the 'black hole' of the bond market is absorbing funds more than expected. Look at this recent three-month and six-month U.S. Treasury auction; the original scale was 163 billion, but the actual auction raised 170.69 billion, pulling that much capital out of the financial market. In a phase of tight liquidity, it's like a big knife swing, forcing the market to gasp for breath.
The decline of Bitcoin is a direct response to the outflow of funds. It's like a person losing too much blood and unable to stand; without the support of funds, the market naturally falls, and the reaction is very direct.
Next is the second layer of reasons — the Federal Reserve's 'cold air.' Everyone is hoping for a rate cut from the Federal Reserve, but the Fed's hawkish stance has instantly cooled expectations for a rate cut, and market confidence in a December rate cut has plummeted, with the probability of a rate cut falling from nearly seventy percent. This change is like a bucket of cold water thrown on risk assets. Market sentiment has worsened instantly, and prices have dropped accordingly. In short, everyone was looking forward to warmth for a vacation, but suddenly being told that the weather will remain cold leads to an instant collapse of mood.
The combination of these two reasons has directly pressured Bitcoin and other risk assets to decline. In the short term, market sentiment is low, panic is spreading, and the selling wave has intensified the drop. However, don’t panic excessively!
Things have taken a turn. If the government resumes operations and the TGA account is replenished, market liquidity will improve, much like filling a pool with water, and the market will warm up. If the Federal Reserve slows down overnight reverse repurchase operations, it can also release liquidity in the short term, easing market pressure. Liquidity, like seasonal changes, will always welcome spring after the cold winter.
So, although the market is difficult right now, there are actually hidden opportunities. Smart investors need to see the direction of liquidity rather than just focusing on the ups and downs of the candlestick chart. On the path of compound interest, you don't have to be the fastest, but you must be the most stable.
Opportunities are right in front of you, are you ready? $ETH #美联储降息 $BTC #加密市场回调
