2025-12-04 18:20:28

At 2 a.m., the crypto world exploded again.

Bitcoin was holding steady around 42,800, but then in just 15 minutes it plunged 2,800 points, breaking straight through the 40,000 mark. When I checked my phone, it was full of liquidation screenshots and cries from people forced to sell at a loss. Even veteran crypto traders with years of experience said their hearts couldn't take it—panic was at an all-time high.

But if you look at it calmly, this plunge really isn't a sign of a trend reversal; it looks more like a short-term shock caused by a sudden liquidity crunch. Once you understand what's really going on, you won't be dragged around by market sentiment.

First, let's talk about the main trigger—the US Treasury bond issuance drained liquidity. Yesterday, the US Treasury issued $163 billion worth of 10-year bonds, but their Treasury General Account (TGA) only had $57 billion left. Institutions scrambled for bonds, aggressively pulling back funds, leaving not enough money in the market. According to data from a leading exchange, Bitcoin's liquidity dropped 42% within one hour. In simple terms, there just weren't enough buyers to absorb the selling pressure—no wonder the price crashed.

The second factor is even more critical—the Federal Reserve is turning hawkish again. Early this morning, Fed official Goolsbee said directly: "It's too soon to talk about rate cuts; inflation isn't under control yet." As soon as he said this, the market's expectation for a rate cut plunged from 60% to 18%. Remember, the crypto market is extremely sensitive to liquidity—when expectations for rate cuts cool off, capital flees instantly.

So this drop is essentially the result of macro-level liquidity tightening combined with a shift in policy expectations. Short-term pain is inevitable, but don't take it as a sign that the bull market is over. The market is still digesting this information. Once liquidity recovers and sentiment stabilizes, we'll have a clearer view of what comes next.

Right now, the most important thing is to stay calm and not let panic cloud your judgment.

BTC-1.64%

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OldLeekConfession

· 6h ago

Here we go again, every time the Fed opens its mouth the market loses three rounds. Liquidity is really something else; when institutions rush for bonds, we end up getting beaten. Don't panic, don't panic, just waiting to pick up some bargains. If the 40,000 level gets smashed, what can we do? Anyway, we're all long-term believers, haha. This guy Goolsbee just keeps saying infuriating things—basically, rate cuts are nowhere in sight. I really don’t get why anyone would sell at a loss at times like this; isn’t that just giving money away? Wait a second, is liquidity really going to recover? Feels like things are going to be turbulent for a while. To those friends still watching the charts at 2 a.m., get some sleep—don’t wear yourselves out. Times like these really test your mindset. I’m just lying flat now.

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AirdropHunter

· 12-04 18:48

As soon as US Treasuries pull liquidity, the entire crypto market collapses—I've seen this play out so many times. It's always blamed on liquidity, always something about the Fed. No matter how nicely it's explained, it doesn't change the reality of my losses. The rate cut expectations dropped straight from 60% to 18%—that's pretty brutal. No wonder everyone's feeling anxious right now. Bitcoin liquidity dropped 42% in just one hour—are these numbers even real? Feels a bit exaggerated. You're right, don't panic, but it's really hard for retail investors to stay calm, especially when you watch your account plummet. This drop is purely a macro issue—short-term pain, but in the long run it shouldn't be a big deal. Hopefully we won't have to go through this over and over again. All the people complaining are just the ones who got stuck holding the bag—that's the norm in crypto, haha. Let's wait for liquidity to recover. My coins aren't going anywhere anyway, so for now, survival is key.

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AirdropHarvester

· 12-04 18:48

As soon as US Treasuries drain liquidity, the market goes haywire—I've seen this playbook before. Goolsbee is really sharp-tongued, directly shattering the market's illusions. 2800 points dropped straight down to 40,000. Honestly, seeing those liquidation screenshots is a bit satisfying. It’s just a liquidity crunch, stop yelling about the end of the bull market. No matter how nicely you put it, it doesn't change one fact: institutions are fleecing us. Institutions are pulling back funds to grab bonds—retail investors are just stepping stones. When liquidity dries up, 90% of people are going to suffer, no exceptions. Calm? I stopped believing in that word long ago—when the money's gone, that's what’s real. This downturn is logically consistent, but what about next time if it’s even worse? Rate cut expectations dropped from 60% to 18%, but the market reaction wasn’t dramatic enough.

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HashBard

· 12-04 18:46

liquidity death spiral but make it poetic... the fed's hawkish whispers are just narrative shifts dressed in macroeconomic drag, honestly

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NotAFinancialAdvice

· 12-04 18:45

Once again, it's the US Treasury causing trouble—this time, there's really no way to avoid it. --- Staying up until 2 a.m. is just asking for trouble, bro. --- Honestly, a liquidity crunch is scarier than anything else. It just crashes the market without discussion. --- Goolsbee's comment is worth a market plunge. --- Don't panic, this is just bottom-churning. The real bottom probably isn't here yet. --- Is it time to buy the dip, everyone, or should we keep watching? --- One word from the Fed and the market panics—it’s a bit ridiculous. --- This time really is different. Liquidity is being forcibly drained. --- Old retail investors can't take it anymore, haha. Us young folks are just lying flat and letting it be. --- Wait, the rate cut expectation dropped from 60 to 18—who took that spread? --- Once you understand the macro picture, a drop isn't so scary. The problem is, who really gets it? --- I bet this wave needs to drop another 3,000 before it bottoms out. What about you guys? --- It's easy to say "stay calm," but who can be calm when their account shrinks by half?

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MetaverseVagabond

· 12-04 18:35

Once again, it's the US Treasury bonds causing trouble. This time it's really not a reversal, it's a pure liquidity crisis. --- From 42,800 to 40,000, just like that, gone. The speed at which institutions are pulling back funds is insane. --- Rate cut expectations dropped straight from 60% to 18%. No wonder the money is fleeing so fast—who would dare catch the falling knife right now? --- Wake up, this is just macro-level games. Don’t get scared by those liquidation screenshots, wait until the dust settles. --- Anyone still watching candlesticks at 2 AM is hardcore. I was already asleep—I'll check how things are when I wake up. --- Liquidity dropped 42% in an hour? That number sounds terrifying. No wonder the buy side can’t keep up at all. --- Fed: We’re not cutting rates. Crypto market: We’re out. It’s just that simple. --- Honestly, at times like this, it’s all about who can keep their cool. It’s really not about technical analysis. --- Wait, when did Goolsbee say that? I didn’t see any news, or am I just too slow to react? --- TGA only has $57 billion left and they're already scrambling for bonds. Is the US really out of money?

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