The market has been quite turbulent lately. Bitcoin has directly fallen below the $86,000 mark, with 270,000 accounts being cleared overnight. Those institutional investors who once shouted "to $100,000" are now almost silent.

As an analyst who has observed the cryptocurrency industry for many years, my judgment is that this wave of fall is not a conventional correction, but rather a direct manifestation of the "liquidity tightening" dominated by the Federal Reserve in the market.

Understanding this logic is actually not complicated. Half a month ago, the market was collectively bullish, and everyone expected the Federal Reserve to cut interest rates in December, with the probability of this expectation reaching as high as 70%. However, Federal Reserve officials continuously released hawkish signals—one said to maintain high interest rates, while another said inflation has not been fully controlled—forcing the probability of a rate cut down to below 50%.

What does this mean? In other words, the low-cost funds in the market are disappearing, and borrowing money has become more expensive. Bitcoin itself does not generate interest; it is purely a capital-driven asset, extremely sensitive to changes in the interest rate environment. When interest rates rise, institutional investors will prioritize selling off these non-yielding assets to recoup cash. Morgan Stanley's latest research also supports this judgment: if the Federal Reserve continues to maintain a tightening stance and dollar liquidity further tightens, not only will Bitcoin be under pressure, but the entire non-yielding asset sector will also face adjustment pressure.

It is worth noting that this liquidity tightening has spread throughout the market. The technology sector of the US stock market is also falling, with leading stocks like Nvidia and Broadcom undergoing corrections, and market risk appetite has clearly declined.