In the early morning, did you really understand the BTC flash crash? Most people were just staring blankly at the candlestick chart, unaware that the "invisible hand" behind the scenes was frantically manipulating things.

The truth is actually quite brutal — this wave of decline is essentially a massive capital flight.

Let’s start with the first blow: the meat grinder of U.S. Treasuries has started operating. During the government shutdown, the Treasury General Account (TGA) has already run dry, and the market is desperately thirsty. Although the Federal Reserve tried to inject liquidity into the banking system, the bond market, this bottomless pit, devours it faster. In this auction of three-month and six-month U.S. Treasuries, the surface amount was $163 billion, but actually withdrew $170.69 billion. After deducting the reinvestment portion played by the Federal Reserve itself, the market instantly bled $163 billion.

When liquidity is abundant, this amount of money might not seem like much. But now we are in a tightening cycle, my friends! It's like a person who is already anemic, and then has even more blood drawn; it's no surprise they would feel faint. As a "barometer" of risk assets, Bitcoin naturally bears the brunt.

The second blow is harsher: the Federal Reserve comes again with cold water. Goolsbee's hawkish remarks directly shattered the fantasy of a rate cut in December — market expectations have dropped from nearly 70%. It's important to know that rate cut expectations are the "lifeline" for risk assets; without this lifeline, how could there not be a short-term crash?

It's like you originally planned to go out when the weather warms up, but the weather forecast says the cold wave will last for another two weeks, and your mood just explodes.

With two knives stabbing at the same time, the exhaustion of liquidity combined with emotional freezing point, how can risk assets not kneel? Bitcoin, the king of volatility, is experiencing a sharp decline that is particularly painful. When the market becomes pessimistic, the stampede effect accelerates the decline, and this vicious cycle just keeps turning.

But stay calm, it's not as desperate as it seems. The key to breaking the deadlock is actually quite clear: wait for the government to restart, and TGA replenishment will inject liquidity into the market, naturally warming up the liquidity; if the Federal Reserve relaxes the capital absorption of overnight reverse repos, short-term pressure can also be alleviated.

The liquidity cycle has always been a repetition. No matter how cold the winter is, spring will always come.

The most difficult times in the market often hide the biggest opportunities. Instead of fixating on the price fluctuations, it's better to understand the flow of funds—this is the key to survival.