At the opening on Wednesday, it was like someone pulled the plug on the entire crypto market—the major coins plunged 6% in just half an hour, the futures market was full of liquidation red numbers, chat groups exploded, and messages like "It’s over, it’s over" were flying everywhere. Many people just cut their losses and ran.

But honestly, after watching the markets for so many years, I actually feel this drop was written in the script long ago. It’s not some black swan event—it’s clearly a "liquidity drain," but most people didn’t see it coming.

The harshest move actually came from the Treasury. The government has been shut down for almost forty days, the national treasury is almost empty, and last week they urgently issued $163 billion in short-term debt for a bailout. That much money doesn’t just appear out of thin air—the market has to come up with real cash to foot the bill. Think about it: when over a hundred billion in liquidity is sucked out all at once, and the crypto market is already a bubble propped up by money, once the liquidity is drained, how could it not collapse? It’s like draining half the water from a fish pond—can the fish still jump around?

The Fed hasn’t been idle either. Previously, the market was dreaming about a rate cut in December, and the probability had climbed to 70%. But then a single "path undecided" comment shattered that dream—rate cut expectations instantly dropped to 45%. That blew things up; short-term capital cut leverage overnight, and liquidations poured in like a torrential downpour. Liquidity was already tight, and with all this chaos, even coins that should have held steady were dragged down.

There’s another detail many people missed—the "interbank liquidity" also got jammed. Year-end is when institutions usually lock up funds anyway...

So this crash wasn’t a technical breakdown at all—it was a macro-level liquidity crunch spreading into the crypto market. Those who understand had already reduced positions and were waiting it out, while the panicked are still trying to buy the dip.