Recently, BTC and the global stock market have collectively plummeted. Many people are feeling anxious as they watch their accounts shrink, even thinking that the market is about to collapse.

In fact, the underlying reasons can be summarized in two key points, and once clarified, there is no need to panic.
First impact: funds are being withdrawn on a large scale.
The U.S. Treasury Department has recently taken two measures that have shaken the market: first, tightening spending, shifting from a previous loose spending model to strict control of expenditures;
Second, sell $163 billion of government bonds to the market.
This operation is like massively draining funds from the pool that connects the stock market and the crypto world.
The sell-off of government bonds means that market funds are flowing back to the treasury, resulting in a sharp decrease in liquidity in the stock market and the cryptocurrency space.
After losing financial support, asset prices continued to plummet like a balloon with a broken string, and the once-active market funds quickly withdrew, causing the situation to cool rapidly.
Second blow: Hopes for interest rate cuts have completely evaporated.
Previously, the market widely anticipated that the Federal Reserve would implement interest rate cuts by the end of the year. This expectation was like a ray of hope in the darkness, leading investors to hope for liquidity easing to boost the market.
However, the public statement by Fed official Goolsbee directly extinguished this expectation, as he clearly signaled that "cutting interest rates is not currently being considered."
After the market's beautiful dream was shattered, panic quickly spread, and investors rushed to sell off assets to avoid losses, forming a vicious cycle of "sell-off - plummet - more panic."
It must be clarified that this is by no means the beginning of a bear market. The current decline is merely a release of emotions triggered by short-term liquidity tightening, much like a sudden rain that is intense but will not last.
Once the U.S. government resumes normal capital injections or the Federal Reserve signals easing, funds will quickly flow back into the market, and the market will rebound rapidly like a compressed spring. Moreover, the greater the current decline, the stronger the momentum for the subsequent rebound may be.
Market fluctuations are like the winds and waves at sea, it is normal for them to occur.
As long as you see through the underlying logic and remain rational, you can stabilize your position amid the fluctuations.

#参与创作者认证计划月领$10,000