At three in the morning, the notification sounds from various encryption communities haven't stopped.

Someone is trembling while staring at the nearly vertical falling candlestick. Some are throwing out screenshots of their liquidations, with the only caption being two words: "Messed up." There are also newcomers who have just entered the space a few days ago, panicking and saying: "Is this going to zero?"

The screen is full of panic.

But to be honest, although this drop was fierce, it wasn’t completely without warning. After years of navigating the market, I have seen too many similar scenarios — it looks like a "sudden crash", but in reality, the funds had already been quietly withdrawing.

Most people only focus on the fluctuating price numbers, shouting about bull markets and bear markets. However, they overlook a more crucial aspect: liquidity. In simple terms, it's about how much money is actually circulating in the market.

This sudden drop in Bitcoin? Essentially, it's due to liquidity being drained.

The fuse is hidden in the US debt market. The US government is on the verge of shutting down, and the Treasury's TGA account (you can think of it as the government's wallet) is almost depleted. The market was already short on cash, and at this time, a massive $163 billion US debt auction came along.

It's like suddenly putting a super high-power pump into a pool, crazily sucking blood from the bond market. The encryption market is the most sensitive to liquidity; when money decreases, a drop is inevitable. As the leader, Bitcoin naturally drops the hardest.

What's worse is the attitude from the Federal Reserve.

Goolsbee's recent speech has directly extinguished the market's fantasies about a rate cut in December. Previously, there were quite a few funds waiting and thinking that hot money would flow in after a rate cut, but now those expectations have completely evaporated. Hesitant funds are starting to flee in a frenzy.

It has fallen sharply, but the logic is actually very clear. There is not enough money, and funds are being withdrawn, that's all.