Recently, private messages and comment areas have been asking the same question: The United States will issue huge Treasury bonds next week, technology stocks are plummeting again, will cryptocurrencies also collapse? As a practitioner who has been in this circle for 8 years and has experienced 3 rounds of complete bull and bear cycles, today I would like to explain this issue clearly, and by the way, share a few coping strategies summarized in actual combat.

The core logic is actually very simple - the market is short of money. Next week, the United States plans to auction $125 billion in Treasury bonds, and another 40 billion corporate bonds will be issued simultaneously. However, this week's trading day is shortened due to the shortening of the holiday, which is equivalent to "less time to grab money, but more money to grab". Anyone familiar with the market knows that liquidity is the lifeblood of the crypto market. For example: the reservoir that was not enough in the first place, and now there are people pumping out with large buckets, do you think the market can not be nervous?

Some people may wonder: what does US bond issuance have to do with cryptocurrencies? The relationship is big. The crypto market has never been a closed system that operates independently, and money flows between different markets - wherever it is safer and where the returns are higher. When traditional financial markets are short of money, some funds must be withdrawn from risky assets (including cryptocurrencies) to cover their positions. Once liquidity tightens, the price volatility is magnified.

Last year, a friend who had been with me for a long time did not listen to the advice and took a heavy position in a niche currency, but encountered a similar liquidity crisis, and the currency price directly dived, with a book loss of more than 20%. He told me afterwards that he had never realized that the external market environment would have such a big impact before. This is the typical cost of ignoring macro linkages.

Seriously, the most tested thing at times like this is mentality and coping strategies. Newbies are often prone to market fluctuations