## Behind Bitcoin's Midnight Plunge: How Capital Dilemmas Evolve into Market Bleeding

Bitcoin suddenly plummeted, catching many off guard. But if you understand the underlying capital flow logic, you'll see this is not accidental but a visible crisis.

**The Fed's Shift in Stance Breaks the Rate Cut Fantasy**

Goolsby's recent speech was unexpectedly "hawkish"—the market had originally held high hopes for a December rate cut, with nearly a 70% probability, now it has fallen to just over 50%. How serious is this shift? For risk assets, expectations of rate cuts are a strong rallying point. Once these expectations are shattered, the market is hit with a cold shower, and short-term pressure spikes.

Investors' sentiment shifts from anticipation to caution, and some even begin to withdraw. This emotional change is directly reflected in asset prices, with Bitcoin currently hovering around $87.69K, up only +0.83%.

**Liquidity Siphoning Is the Real Killer**

But emotional collapse is only surface-level; the real danger lies in liquidity.

The U.S. government shutdown has led to the depletion of the TGA (Treasury General Account), further tightening an already strained market liquidity. The recent U.S. debt auction seemed modest—nominal size of $163 billion for 3- and 6-month bonds—but actual成交额 soared to $170.69 billion.

Simply put, $163 billion was siphoned off by the bond market.

The Fed attempted to ease pressure through bank injections, but with limited effect. When the bond market, this massive funnel, starts siphoning funds, the flow into cryptocurrencies and other risk assets naturally dries up. The market bleeds excessively, with Bitcoin bearing the brunt. This is not a price war but a capital war.

**Why Do Risk Assets Fall First?**

In a tightening cycle, large-scale capital outflows can crush the confidence of any risk asset. During easing periods, no matter how much money flows out, someone will catch it; in tightening times, every outflow could be the last straw that breaks the camel's back.

Bitcoin's decline is the most direct signal of a market running out of money—just as excessive blood loss causes dizziness, the disappearance of capital support severely damages the vitality of risk assets.

**Breaking the Deadlock Takes Time**

But don’t be overly pessimistic. Once the government resumes operations, replenishing the TGA will inject funds again, gradually filling the dried-up liquidity pool; if the Fed slows down its absorption of overnight reverse repos, short-term liquidity pressures will ease.

Liquidity cycles are never eternal deadlocks; with the changing seasons, winter will eventually pass.

For investors, the key is not chasing highs and lows but learning to interpret capital flows. When you understand the rhythm of liquidity, you can stay clear-headed during the market's toughest times—often the greatest opportunities lie there.