In the past 72 hours, players in the crypto world collectively experienced a 'roller coaster'.
Last weekend, as the U.S. federal government shutdown crisis escalated, the cryptocurrency market was severely impacted. Bitcoin plummeted to around $72,000, and Ethereum fell below $2,100, causing a surge in liquidation amounts across the network, with leveraged long positions suffering heavy losses. However, with the Senate passing the funding bill last night, the government shutdown crisis was resolved, and the market quickly staged a V-shaped rebound, with Bitcoin strongly pulling back above $76,000, and Ethereum rising back to $2,240.
The culprit of the crash: liquidity siphoning and policy uncertainty
The government shutdown 'sucks dry' liquidity.
During the shutdown, the U.S. Treasury General Account (TGA) has been unable to spend normally, causing the balance to continue to swell, pulling about $700 billion in liquidity from the market, effectively equivalent to a rate hike. Bitcoin, as a high-risk asset, has been the first to bear the brunt, with funds retreating to safer areas like government bonds.
Leveraged chain liquidations worsen the situation.
Market panic triggered concentrated liquidations of high-leverage long positions, resulting in a 'cascade-style sell-off.' Data shows that over 160,000 people were liquidated during the crash, with altcoins becoming the hardest hit, as tokens like ZAMA experienced a single-day decline of over 20%.
Macroeconomic policy suppression.
Trump's tariff policy (with a maximum of 60% tariffs) raises inflation expectations, and the market is concerned that the Federal Reserve will delay interest rate cuts, putting pressure on risk asset valuations. At the same time, key cryptocurrency legislation (such as the Digital Asset Market Clarity Act) has stalled due to the shutdown, exacerbating uncertainty in the regulatory vacuum.
Rebound momentum: Policy turning points and capital inflows.
The end of the shutdown releases liquidity.
After the government restarts, the TGA account will begin to spend the backlog of funds, injecting hundreds of billions of dollars in liquidity into the market, forming 'invisible quantitative easing.' Historical data shows that the crypto market rebounded by 10%-15% within two weeks after the end of the shutdown in 2019.
Short covering and technical support.
Bitcoin touched a key support level around $72,000, triggering algorithmic trading buy orders and short covering, accelerating the rebound. Spot ETFs (like BlackRock's IBIT) still maintain net inflows, with a significant institutional capital support effect.
The long-term narrative remains unchanged.
Despite short-term volatility, the U.S. 'Strategic Bitcoin Reserve' plan continues to advance, with deepening institutionalization (such as the Texas government allocating Bitcoin ETFs), and the long-term supply-demand structure still leans towards optimism.
Market Outlook: Focus on three major signals.
Liquidity barometer.
If the TGA account accelerates spending (referencing the 2021 model), Bitcoin may regain upward momentum; conversely, if the Federal Reserve maintains a hawkish stance, volatility will persist.
The critical role of ETF capital flows.
Net inflow data for spot ETFs is a barometer of market sentiment. If institutional funds flow back significantly, it may push Bitcoin to challenge the $80,000 resistance level.
Progress in regulatory policies.
If Congress accelerates the passage of the cryptocurrency market structure bill, it will significantly boost institutional confidence; conversely, delays may suppress new capital inflows.
This V-shaped reversal once again confirms: the policy market plays with heartbeats; surviving is the key to laughing last.
For ordinary players, the current market needs to be wary of high-leverage traps, focusing on opportunities for phased layout of mainstream coins to avoid blindly chasing altcoin bubbles. After all, bull markets often have sharp declines, but only those who leave enough ammunition can seize the rebound's bow and arrow.
Interactive topic:
In this rollercoaster market, are you 'successfully bottom fishing' or 'cutting losses and leaving'? Feel free to share your actions in the comments! 👇