At 3 AM, my phone vibrated so hard that the bed shook. I reached over to check the market, and Bitcoin was sliding down right at the 65,000 mark. The community was already in an uproar, filled with cries of 'We got cut by the institutions again.'
But as someone who has been watching the crypto market for 10 years, I took a sip of hot tea while looking at the candlestick chart—this is no black swan. Clearly, it's two 'money siphons' working overtime. Newbies need not panic when they understand what's happening; they can instead wait for opportunities.
The first siphon: the U.S. Treasury's 'little vault' replenishing stocks.
To put it simply, the U.S. Treasury's 'TGA account' ran dry overnight, dumping 163 billion in government bonds to fill the gap. Where does this money come from? Investors can't just conjure it out of thin air; they can only move money from the crypto sphere or stock market to take over. The crypto market isn't very deep to begin with, and when hundreds of billions of liquidity are siphoned off at once, Bitcoin, as a 'barometer,' naturally can't hold up and falls. This is just normal capital movement and has nothing to do with institutions 'maliciously harvesting.'
The second pump: The Federal Reserve's "expected U-turn"
Not long ago, the market was collectively betting that "there will be a rate cut in December," and bulls were eager to enter the market waiting for the "money release." But then Federal Reserve officials suddenly stated: "Rate cut in December? Don’t even think about it!" This was bad; the bulls who previously bet on the rate cut panicked and hurried to close their positions, and with liquidity already tight, this wave of panic directly crashed the market even harder—plainly speaking, this is a volatility caused by "expectation differences," not due to any major issues in the market.
Old fans all know that I have experienced several "blood-drawing markets" in 18 and 21 years, summarizing 3 key takeaways that beginners can directly copy: Remembering them is 100 times more useful than cursing in the streets.
Don't be a "knife-catching hero": Buying the dip now is like reaching out to catch a falling knife! Wait until the 3-day moving average clearly turns upward, and the trading volume increases, indicating that real money has entered the market. Only then is it not too late to take action. I lost half a year's salary in 2017 because I rushed to buy the dip without waiting for signals; now I've cemented this rule in my trading plan.
Focus on two "money-spraying signals": Next week, pay close attention to whether the Federal Reserve will ease RRP operations (simply put, giving money to the market). Also, wait for the U.S. Treasury's TGA account to be replenished; the funds that were moved away will gradually flow back. Until these two signals appear, let's just be "onlookers" and watch more while acting less.
Don't go all in: Even if you really can't help but want to test a position, your position absolutely cannot exceed 20%, and you must set an 8% stop-loss line—just like wearing a seatbelt while driving, which feels bothersome usually, but can save your life in an emergency. I've seen too many beginners go all in and get washed out by a single fluctuation, only to cry out, "I'll never touch it again"—why bother?
Having played in the crypto market for 10 years, what I want to say to beginners is: A big drop in K-line is not scary; what's scary is panicking over a conspiracy out of blind guesses. This kind of liquidity "winter" usually lasts no more than a few weeks; institutions are not gods; they just understand signal waiting better than retail investors.
Instead of wasting emotions cursing in the community, it's better to memorize the 3 key takeaways I mentioned over the next few days. The market always rewards the "hunters" who can stay calm, not the "herds" who panic and follow blindly.
