Woken up at three in the morning by a fan's private message: 'Old A, I just got stopped out of my long position; who caused this big green bar?' Opening the market view, good grief, Bitcoin was smashed down from 67000 to the 65000 mark, and the community was filled with cries of 'should we cut losses?', busier than a morning vegetable market.
First, give the friend who is panicking and losing sleep a dose of reassurance: this is not some baseless disaster of a 'black swan', nor is it a deliberate act by the big players, but rather two 'money-sucking black holes' coming together, purely coincidental but with doubled impact. As someone who has been watching the crypto market for five years, I will break down the core logic I uncovered in the early hours for you. Once you understand it, you'll know whether to panic or wait.
The first to create trouble is the U.S. Treasury's 'money-sucking method'. Recently, their TGA account was about to run out, just like a family running out of food and urgently hoarding stock, they urgently sold $163 billion in treasury bonds. This is no small amount, equivalent to inserting a giant straw into the market—guess what happened? Over $170 billion in liquidity was completely sucked away.
We all know that encrypted assets are like the 'money face color' master, and when liquidity is pulled away, the first to be abandoned is definitely this type of high-risk variety. Just like when someone suddenly takes away more than half of your milk tea, what remains naturally isn't as fragrant. Bitcoin was hit first, which is completely understandable.
The second thing adding fuel to the fire is the 'hawkish big stick' thrown by the Federal Reserve. Early in the morning, the Fed's Goolsbee suddenly stated that inflation has not yet been brought down and that there has been no consideration for interest rate cuts in December. Once this statement was made, those short-term funds betting on interest rate cuts by the end of the year panicked—previously the market was 70% certain of a cut, now it has dropped directly to 45%, like a roller coaster.
This group of short-term traders panicked and started to close their positions. Originally, everyone was holding the idea of ‘waiting for interest rate cuts to rise’, but someone ran first, and the rest could only follow suit, forming a situation of 'bulls stepping on each other'. Bitcoin had already had its liquidity drawn away, and with this disturbance, the drop was like a kite with a broken string.
But there's really no need to rush to delete trading software, why do I dare to say that? Because this liquidity tension is 'temporary'. Once the U.S. government's shutdown risk passes and the TGA account is replenished, those funds that were sucked away will naturally flow back to the market; furthermore, if the Federal Reserve lowers the reverse repo scale next week, dollar liquidity will immediately ease—this kind of 'money shortage' situation usually only lasts a few weeks at most.
To be honest, staring at the K-line every day to see the ups and downs is not as good as spending ten minutes to understand the liquidity trend. I have seen too many people who made money in a bull market relying on luck, only to lose it all in a bear market by 'guessing tops and bottoms'; but those who can survive through bull and bear markets never rely on watching the market at three in the morning, but rather on the determination to understand 'where the money flows'.
This wave of adjustment, to put it plainly, is the 'test voucher' issued by the market to those with patience. If you are scared out of your wits by this big green bar, that would really be a pity; if you can calm down and wait for liquidity to warm up, you might pick up cheap chips instead.
