Early morning big dump, don’t panic! Here are two core reasons explained clearly—there’s a turnaround once we get through this

The cryptocurrency market suddenly plunged early in the morning, and many people are calling it “unbelievable.” Actually, this isn’t surprising at all—the core issues are that the Marketplace is out of money and everyone’s expectations for interest rate cuts have cooled down. These two factors together made a fall highly probable!

Currently, the U.S. government is shut down, and the TGA account hasn’t been “funded” again. The market was already desperately short of money, and this time, the U.S. Treasury auctioned more than planned—originally aiming to sell $163 billion in short-term Treasury bonds, but actually sold $170.69 billion, exceeding expectations and pulling more cash out. After deducting the portion the Federal Reserve helped absorb, the remaining $163 billion had to be borne by the market itself, effectively pulling that much cash out in a short period. When the market has plenty of money, this isn’t a big deal, but right now, with liquidity already tight, such a drain hits risk assets like cryptocurrencies hard. Bitcoin’s initial plunge was the most direct response.

Adding to the pressure is the attitude of the Federal Reserve. Recently, official Goolsbee spoke very firmly, insisting on maintaining tightening policies, which directly poured cold water on the market. Previously, everyone thought there might be a rate cut in December—probability was nearly 70%. Now, that expectation has dropped sharply. Remember, “interest rate cuts” are a key confidence booster for crypto prices. When that confidence weakens, many rush to sell assets for safety, making the decline even steeper.

But everyone doesn’t need to panic! The market is indeed tough right now, but a turnaround is actually imminent. The key to resolving this is “when will the money come back”: once the U.S. government resumes operations and the TGA account starts replenishing funds, money will gradually flow back into the Marketplace. If the Federal Reserve reduces its absorption of short-term funds—like slowing down overnight reverse repurchase operations—the liquidity shortage can also ease. In simple terms, the current cash shortage is temporary, not permanent. Once policies adjust, the pressure will naturally lessen.

Although the market is frustrating, the logic is simple: don’t just focus on the candlestick charts and panic. Understanding whether the Marketplace has liquidity is more important than anything else. When liquidity loosens, pressure on cryptocurrencies will ease naturally. Hang in there now, and there will be opportunities ahead!