Woken up by my phone vibrating at three in the morning, I opened the market app and was instantly stunned; my Bitcoin plummeted, and the numbers in my account were glaring red, with the group chat full of cries of 'What happened?' and 'There was no warning!' Honestly, seeing this scene didn't surprise me at all; instead, I found it amusing: 90% of retail investors always make the same mistake, just focusing on the ups and downs of the candlestick charts while completely ignoring the underlying logic that truly determines the market direction. Today, let's get straight to the point and break down the truth behind this crash in plain language, once you understand it, you'll never be repeatedly harvested by the market again!
Let me throw out my core point: this crash has nothing to do with technical breakdowns or market manipulation, the root cause is simply two words: lack of money! Moreover, it has been drained dry by two major 'invisible siphons', which are the fundamental rules of the cryptocurrency market.
The first siphon is the U.S. Treasury auction, this 'gold-swallowing beast.' Some may ask how U.S. Treasuries have anything to do with Bitcoin? That’s a big mistake! Now that the U.S. government is on hold, the TGA account of the Treasury (simply put, the country's 'checking account') has long run dry, putting the entire financial market in a 'water shortage' state. The Federal Reserve initially wanted to ease the situation by injecting some liquidity from the bank side, but the bond market is such a black hole that it simply couldn’t hold.
In this round of three-month and six-month U.S. Treasury auctions, a nominal amount of 163 billion was supposed to be withdrawn, but in reality, 170.69 billion was taken out. After deducting the reinvestment portion from the Federal Reserve, it amounts to a forced withdrawal of 163 billion in liquidity from the market in a short period. What does this mean? It’s like a group of people drinking water in a desert, where the water is already scarce, but someone comes in with a big water bucket to grab it all. Those most delicate 'flowers' (risk assets) will surely wilt first, right? Bitcoin, as the 'vanguard' of risk assets, was the first to be hammered down. In simple terms, the market lost its funding support, and naturally, it couldn’t hold on.
The second siphon is the 'hawkish cold water' poured by the Federal Reserve. The market was eagerly anticipating an interest rate cut in December, which is a 'stimulant' for risk assets since cheaper money encourages investment in high-volatility products like crypto. However, once Bullard opened his mouth, it directly doused everyone with a bucket of cold water, clearly establishing a hawkish stance and causing the probability of a December interest rate cut to plummet from nearly 70%.
It’s like you’re all excited planning a weekend spring outing, but then the weather forecast the day before predicts three straight days of heavy rain. Who understands that feeling of disappointment? The market is the same; once the interest rate cut expectations cool down, short-term funds panic immediately and start selling off. What’s even worse is that the tight liquidity and cooling emotions create a vicious cycle: the more it falls, the more panic there is, and the more panic, the more selling occurs, leading to a pile of leveraged positions being forcibly liquidated on mainstream trading platforms, magnifying the downward trend.
But old followers know that I never sing bearish nor blindly bullish. Here I must reassure everyone: there’s no need to panic excessively! The liquidity cycle in the crypto market is like the changing of the seasons; even the coldest winter will eventually pass. The key is to identify the signs of breaking through.
The first signal: the government resumes operations. As long as the government starts working again, the TGA account will begin to replenish funds, which is like adding water to a dried-up market reservoir, and liquidity will naturally improve gradually. The second signal: the Federal Reserve slows down the overnight reverse repurchase operations. This is like the central bank collecting less short-term funds from the market, allowing more money to flow into other fields, thereby alleviating the pressure on the crypto market.
To speak from the heart, making money in the crypto market has never relied on guessing candlesticks or listening to rumors; it’s about understanding the flow of funds. Those who spend all day staring at trading software might as well spend more time looking at U.S. Treasury auction data and listening to the Federal Reserve's statements, as these are the keys to determining your account's gains and losses.
Finally, let me tell you a practical truth: the tougher the market conditions, the easier it is to find opportunities. I have compiled key signals such as U.S. Treasury auctions and Federal Reserve policies into a monitoring checklist, which will be updated in real-time on my homepage. Following me is definitely the right choice@男神说币 #加密市场观察 $BTC
