2025-12-21 22:20:30

The market has been quite turbulent lately. Bitcoin has directly fallen below the $86,000 mark, with 270,000 accounts being cleared overnight. Those institutional investors who once shouted "to $100,000" are now almost silent.

As an analyst who has observed the cryptocurrency industry for many years, my judgment is that this wave of fall is not a conventional correction, but rather a direct manifestation of the "liquidity tightening" dominated by the Federal Reserve in the market.

Understanding this logic is actually not complicated. Half a month ago, the market was collectively bullish, and everyone expected the Federal Reserve to cut interest rates in December, with the probability of this expectation reaching as high as 70%. However, Federal Reserve officials continuously released hawkish signals—one said to maintain high interest rates, while another said inflation has not been fully controlled—forcing the probability of a rate cut down to below 50%.

What does this mean? In other words, the low-cost funds in the market are disappearing, and borrowing money has become more expensive. Bitcoin itself does not generate interest; it is purely a capital-driven asset, extremely sensitive to changes in the interest rate environment. When interest rates rise, institutional investors will prioritize selling off these non-yielding assets to recoup cash. Morgan Stanley's latest research also supports this judgment: if the Federal Reserve continues to maintain a tightening stance and dollar liquidity further tightens, not only will Bitcoin be under pressure, but the entire non-yielding asset sector will also face adjustment pressure.

It is worth noting that this liquidity tightening has spread throughout the market. The technology sector of the US stock market is also falling, with leading stocks like Nvidia and Broadcom undergoing corrections, and market risk appetite has clearly declined.

BTC0,4%

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GasFeeVictim

· 2025-12-24 21:41

270,000 people went bankrupt overnight, this is the game we play... As soon as hawkish signals appear, funds evaporate instantly, it's incredible. Institutions are now really quiet, where was all the bravado before? Liquidity is the real daddy. Rising borrowing costs are indeed a killer move; the crypto world really depends on capital. How brutal will this drop be? Even non-interest-bearing assets are being sacrificed. Federal Reserve: I just say a few words, and you all collapse, haha. Even Morgan Stanley is saying this, what can retail investors do... just cut losses and exit. Nvidia is also falling, which shows it's really not just about the coins anymore. Low-cost funds are gone, so I, a commoner, have no chance either. Expectations have been cut from 70% directly down to below 50%, the market sentiment has collapsed halfway. The interest rate environment is so sensitive; next time before the Federal Reserve meeting, I’ll just lie flat.

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MetaverseLandlady

· 2025-12-24 18:51

270,000 traders wiped out overnight—that's the cost of betting against the Federal Reserve. It really hurts. --- As soon as hawkish signals appeared, low-cost funds fled. No wonder those institutional players have gone silent. --- When interest rates rise, Bitcoin has to kneel. Basically, the logic is that no one is willing to take the other side. --- It's either liquidity or tightening—at the end of the day, it's just not enough money to go around. Institutions need to recoup cash. --- US tech stocks are losing value, so why should the crypto market be immune? Be realistic, everyone. --- The probability of rate cuts dropped from 70% directly below 50%. Such a quick reversal—who's to blame? --- All non-yielding assets are taking hits. Bitcoin is just collateral damage. This round of cleansing isn't over yet. --- After so many years of market observation, I increasingly believe the Federal Reserve is the biggest market maker. --- 28,000 accounts are gone—that's a pretty shocking number. Is it real or fake? --- Since interest rate changes are so sensitive, will it just take the Fed softening its stance to send prices soaring again?

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WhaleSurfer

· 2025-12-22 16:13

270,000 people went bankrupt overnight, this is the real meat grinder. Powell's move is really ruthless, flipping the script just like that. Those who were optimistic are now eating dirt, and the slogans from institutions no longer hold any weight. With borrowing becoming expensive, BTC is bound to fall; this logic is sound. The entire market is going down with it, and when NVIDIA is falling, you know how severe it is. I just want to ask when will the rate cuts come to save the market?

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OnchainHolmes

· 2025-12-21 22:50

In simple terms, it means there is no money left, the tide of funds has receded, and everyone has to run naked.

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GasFeeSobber

· 2025-12-21 22:50

Again talking about the Fed, to put it directly, it means there's no money left.

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GateUser-2fce706c

· 2025-12-21 22:42

When others are afraid, I am greedy. I have long said that this pullback is the best opportunity to enter a position. Why are you still struggling with breaking below 86k? Opportunities are fleeting; buying low is key. Liquidity tightening is actually a high point for planning for the future. 270,000 people got liquidated? Those are the ones who didn't understand the big picture. I have long stated the importance of recognizing this logic... This time is different, but opportunities always arise at the moment of greatest fear. The time to buy the dip has arrived. Is the Fed tightening? I mentioned three years ago that this is the beginning of wealth redistribution. Understanding this liquidity situation makes it clear what Bitcoin's next move will be; time waits for no one. Those still in a Short Position are like those who doubted the internet back in the day. Just wait and see. The opportunity in the entire non-yielding asset zone is right in front of us; whoever seizes the opportunity first will make money. The overall trend is already very clear. Instead of getting caught up in technical analysis, it’s better to see through the macro logic.

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NFTArchaeologis

· 2025-12-21 22:37

The winter of liquidity retreat looks like watching the antique market crash during this round of liquidations - when times are good, everyone dares to bet, but once the financial environment turns, those things without intrinsic value support are the first to suffer. Institutions have always been realists.

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0xTherapist

· 2025-12-21 22:37

270,000 people clearing the field, this is what the funding situation is saying... Powell is really ruthless.

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LiquidationAlert

· 2025-12-21 22:29

270,000 Get Liquidated, this time it's really ruthless, clearing everything overnight is too extreme. As soon as the hawkish signal came out, it was clear something was going to happen. With borrowing becoming expensive, who would dare to hold a Heavy Position? The institutions that called for 100,000 are now in an awkward position; they should have woken up earlier. This wave is not a pullback; the Fed has directly tightened the liquidity leader, and even interest-bearing assets cannot escape. NVIDIA has dropped like this, one can imagine how hard non-interest-bearing assets must be suffering.

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