Bitcoin drops below $100,000, Ethereum falls below $2,000, and altcoins all decline more than 30%—this rapid downward move has again made the market think of the black swan curse. But from a historical perspective, every major correction in crypto assets has clues, especially the tidal changes in global liquidity.

This crash was actually not unexpected. The Federal Reserve has not ended its rate hike cycle, and the U.S. Treasury has increased the issuance of government bonds to fill the deficit gap. These two forces together are "withdrawing liquidity" from the market. The data is clear: since 2025, the yield on 10-year U.S. Treasury bonds has surged by 120 basis points. The result? Money is flowing into fixed-income assets, leaving risk assets neglected. As a high-risk asset, cryptocurrencies are naturally the first to be affected. In November alone, over $20 billion was withdrawn from crypto funds.

What’s more painful is that the liquidity structure within the crypto market itself is fragile. Market liquidity is tightly held by a few market makers, with the top 5 controlling 75% of Bitcoin liquidity. When traditional finance tightens, these market makers face the dilemma of soaring financing costs and increasing risk exposure. Their only solution is to offload their crypto assets, but no one is willing to buy. A single market maker’s liquidation can create a hole.

Liquidity exhaustion often also presents an opportunity. When the market fully releases its pessimism, liquidity tides will reverse and surge back.