In those few seconds after the market opened on Wednesday, I truly witnessed what is called a "flash crash".

Nasdaq futures fell sharply by 1.6%, while Bitcoin was even more outrageous, dropping 6% within half an hour. The group was instantly in an uproar, with cries of "black swan" and "zero" echoing one after another, and many people nervously cleared their positions.

But when I calmed down and analyzed the data, I found that this wave of plummet had actually been foreseen—it was not a black swan event at all, but rather hundreds of billions of funds being "pulled away by clear signs."

**Let’s first look at the U.S. Treasury.** The government shutdown lasted for 35 days, and the TGA account has completely run dry. Last week, an emergency issuance of $163 billion in short-term Treasury bonds was made. Where did this money come from? The market has truly taken over, and liquidity was instantly drained.

**Looking at the Federal Reserve's stance again**. A statement saying "the policy path is not yet determined" directly reduced the expectation of a rate cut in December from 70% to 45%. Short-term capital immediately panicked, quickly reducing leverage overnight, and a pile of liquidation orders surged out, naturally accelerating the downward trend.

**Finally, there is a money shortage in the interbank market**. The usage of the Federal Reserve's emergency liquidity tools has soared to its highest level since the pandemic, and the overnight lending rates are also on the rise. Active funds are completely locked in government bonds and reverse repos, and cannot flow into the stock market or the cryptocurrency space.

So this round of decline is essentially "money has been temporarily withdrawn."

As long as the government shutdown is lifted and the Federal Reserve eases up a bit, this capital will quickly flow back. Cutting losses now? That would be throwing chips at the lowest point. Holding cash, closely watching the oversold BTC and ETH, and waiting for the signal of capital inflow is the correct approach.