The recent big dump in the global market appears to be a combination of various Unfavourable Information, but in reality, it is due to the liquidity of the US dollar being "bled out."

Bitcoin has fallen below $100,000 for the first time since June, with the US stock market experiencing its largest single-day drop in nearly a month, even gold couldn't withstand the fall back below $4,000. Behind the simultaneous collapse of the stock and cryptocurrency markets lies a shocking fact - the US government has been shut down for 34 days, directly 'evaporating' nearly $700 billion from the market.

Here’s the thing: As of November 5, due to the government shutdown, the Treasury was forced to pile up a full $1 trillion in the Federal Reserve account. This money was supposed to flow into the market to give the economy a boost, but now it’s stuck in the account and can’t move. You can think of it as the financial market's "blood bank" suddenly having more than half of its inventory missing.

**Three dangerous signals are flashing in sync**

Let's first look at the Federal Reserve's permanent repurchase agreement tool—this thing usually doesn't get much attention and serves as a lifeline for banks when they are short on cash. Last Friday, the usage skyrocketed to $50.35 billion, setting a new historical record. You should know that when banks go to the Federal Reserve to borrow money, it basically means they are publicly admitting, "I have cash flow problems." The fact that they are frantically borrowing without caring about appearances shows how serious the situation is.

The overnight financing rate for guarantees surged by 22 basis points on October 31, reaching 4.22%, which is significantly higher than the Federal Reserve's benchmark rate. This indicator usually sees little fluctuation, but a sudden jump like this means that the cost of borrowing money between financial institutions is skyrocketing—everyone is short on cash, and no one is willing to lend easily.

Liquidity crises are like dominoes. Government account freezes → market cash decreases → institutional borrowing costs soar → asset prices come under pressure and fall. The crypto market is particularly sensitive to liquidity, which also explains why Bitcoin is the first to break down.

When the market is low on liquidity, all assets are "robbing blood" to survive.