Once the market sniffs the scent of risk and uncertainty, the reaction is always the same - sell, sell, sell, and then hold the money tightly.

In this round of global asset plunge, there are actually three forces simultaneously at play:

**Liquidity expectations were slapped in the face**

Previously, everyone was betting that the Federal Reserve would continue to cut interest rates, which would naturally lead to an increase in assets due to more money. However, Powell directly stated, "Adjust flexibly based on data"—to put it simply: whether to cut or not is still uncertain, so take it easy.

Once expectations are dashed, the stock market changes instantly.

**High-value assets begin a run on withdrawals**

Tech stocks and cryptocurrencies, these risky assets, have already risen to historical highs, and institutions are holding all the profit chips. Once market sentiment shifts to a risk-averse mode, those who run slowly will be in trouble.

The Nasdaq leads the decline, Bitcoin follows the crash, and the entire market is like a domino effect.

**Can't see the future, just pull out first**

The U.S. government shutdown has set a new record, and key economic data is no longer being released. The market has no benchmarks, and in this situation, the first reaction of institutions is to reduce their positions first.

So this drop is so severe.

**But is this the bear market?**

Don't panic yet.

A sharp decline and a bear market are two different things. A true bear market must meet two conditions: capital completely withdraws and does not return, and macro policies are tightened comprehensively, locking in liquidity.

What about now? There is still a lot of money lying in stablecoins and U.S. Treasuries, and the Federal Reserve's policy direction is still in a transition period leaning towards easing.

To put it more accurately, this round of adjustment is more like a "liquidity bottleneck in a bull market"—like a brief pause before the roller coaster climbs, it’s not a decline, it’s a build-up of energy.

**What is smart money doing?**

When retail investors panic and sell off, large funds often operate in the opposite direction:
Institutions are re-accumulating mainstream cryptocurrencies at low levels, the scale of the stablecoin capital pool remains large, and the long-short ratio in the derivatives market has not completely lost balance.

The market looks at sentiment in the short term and at chips in the long term. The current fluctuations may be just a washout before the next round of price increase.