A market that was just stable and trending upward a second ago can suddenly plunge the next. When I opened the candlestick chart yesterday early morning, I believe many people felt it — Bitcoin sharply declined, and the US tech sector also followed lower.

It may seem sudden, but in fact, it’s not. This wave of adjustment has long been foreshadowed in the shadows of liquidity.

**Where is the liquidity disappearing to?**

Recently, the US fiscal system’s general account has remained at a low level. Meanwhile, the bond market is like a nonstop pump, continuously draining liquidity from risk assets.

The recent US Treasury auction is a good illustration: with a face value of 163 billion USD, it was ultimately sold for 170.69 billion USD. What does this extra amount mean? It indicates that market participants are pulling out real dollars from their pockets to purchase these bonds. Switching from risk assets to safe assets essentially means pulling real money out of liquidity-sensitive assets like Bitcoin and stocks.

When liquidity is abundant, such adjustments are hardly noticeable. But now, it’s different — the market is like a tightly stretched string; just a slight external force can cause intense resonance. Bitcoin and tech stocks, as the most vulnerable risk assets, naturally become the "drain outlet" for liquidity contraction.

**Institutions are taking action**

It’s not just the bond market that’s exerting influence. The withdrawal of institutional funds is also accelerating — clues can be seen from changes in ETF holdings. These participants, often regarded as "smart money," start adjusting their positions at the first sign of liquidity shifts.