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Last night, the crypto market experienced a 'black swan' event — mainstream currencies saw a sharp drop, with daily declines exceeding 20%. The liquidation amount in the contract market instantly broke 10 billion, and social media was filled with cries of 'being trapped' and 'panic selling'. Many new investors were hit hard as soon as they entered the market, messaging me asking: 'Is the bull market completely over? Should we run away or buy the dip now?'
In fact, while this wave of decline seems sudden, there were early signs. As an analyst deeply involved in the crypto market for 8 years, I reminded the community last week: 'Signals of macro liquidity tightening have emerged, high-risk assets need to be wary of short-term adjustments.' This time, the real behind-the-scenes drivers are two key variables in the global financial market.
Two, in-depth analysis: the core logic of the crash (pure practical content)
Many people mistakenly believe that the rise and fall of cryptocurrencies only depend on 'market funds', but in fact, the current market is already deeply tied to the macroeconomy. The essence of this decline is a chain reaction caused by liquidity contraction, unrelated to the fundamentals of the currencies themselves.
Fiscal 'draining': The lethality of 163 billion government bonds
Recently, a major country’s treasury department issued 163 billion US dollars in government bonds at once, equivalent to inserting a 'super straw' into the global financial market. Many institutions had to sell high-risk assets to raise funds for subscribing to government bonds, and cryptocurrencies, being the highest-risk asset class, naturally became the first targets for sell-offs.
Monetary policy 'cooling': easing expectations are completely dashed
Previously, the market generally expected major global central banks to signal interest rate cuts, but the latest statements clearly indicated 'no consideration for easing at this time'. This news shattered the illusion of 'low-cost funds', and the hot money that had originally flowed into the crypto market began to withdraw, further intensifying selling pressure.
Key conclusion: This is not the 'end of the bull market', but a stepped decline triggered by a short-term liquidity crisis. It’s like a glass of water being temporarily removed; the glass itself (the value of the currency) has no problem. Once liquidity returns, the water level will inevitably return to or even exceed previous levels.
Three, a must-read for newcomers: 3 survival rules (my exclusive strategy)
The more panic there is, the more rational one must remain — this is the core secret of my survival during the two bear markets in 2018 and 2022. For the current market situation, here are 3 clear suggestions for newcomers: follow these to avoid traps and seize opportunities.
Refuse to panic sell: Don't hand over your chips to the dealer
The chips being sold off amid panic are precisely the 'bloody chips' in the eyes of institutions and seasoned players. The law of the crypto market is always that 'the bottom is born in panic'; selling now is like giving up profits at the lowest point.
Buy in batches at low prices: use 'small dollar-cost averaging' to dilute costs
Don't think about 'buying at the absolute bottom' (no one can accurately predict the low point). My strategy is: for every 5%-8% drop, use 10%-15% of idle funds to buy in batches, thus averaging the cost through dollar-cost averaging. This avoids being trapped by buying at the bottom all at once and allows for quick profits during rebounds.
Stay alert to signals: policy is the 'starting gun' for rebounds
Focus on two key signals moving forward: first, whether there are actions to release liquidity from the fiscal side; second, whether central banks adjust their monetary policy stance. Any sign of easing will be the best time to increase positions, and rebounds are likely to appear in a 'V-shaped reversal' form.
Four, my clear view: now is a prime opportunity for positioning, not a time to run away
Many people will ask: 'Is this the institutions offloading?' My answer is: short-term fluctuations are for washing the market, and the long-term trend remains unchanged.
The underlying logic of the current encrypted market — technological innovation, institutional adoption, and compliance promotion — is continuing to improve. This wave of decline is more like the main force using macro negative news to 'wash the market', clearing out the unsteady retail investors to eliminate obstacles for the subsequent rise.
The cryptocurrency circle is always a battlefield of 'when others panic, I am greedy', but the premise of greed is 'rationality'. The most common mistake beginners make is to chase high during surges and panic sell during drops, while true winners lay out strategies in panic and exit during frenzy.
Five, let me say something from the bottom of my heart
The crypto market has never been a 'get rich overnight' casino, but an arena that tests cognition and mindset. If you feel confused and helpless now, not knowing how to judge the market or formulate strategies, consider following me — here you will find the most timely market interpretations, hardcore fundamental analysis, and real-time interactive guidance from exclusive communities.
I will continue to track liquidity changes and policy trends, sharing signals for increasing and decreasing positions at the first opportunity. Market conditions are fleeting, and opportunities are always for those who are prepared. Click to follow, let’s achieve stable profits in the crypto market together.
