Opinion: The core reasons for the market decline are liquidity tightening and hawkish comments from the Federal Reserve.

Analyst Cato_KT stated in an article on the X platform that the core reason for the market decline in the early hours of today was the "draining" of funds from the market during the liquidity tightening phase. Specifically, there are two points: 1. The US Treasury auction led to a liquidity crunch. Today's auction of 3-month and 6-month US Treasury bonds totaled $163 billion, causing a large amount of funds to be drawn from the financial market, putting pressure on risk asset prices. 2. Hawkish comments from Federal Reserve Governor Goolsbee caused the probability of a December rate cut to drop from 69.8% to 67.5%, further damaging market confidence. These two reasons, one a fundamental cause and the other a contributing factor, combined to suppress risk assets, especially Bitcoin, whose decline was more noticeable. The solution is simple: on the one hand, the government resumes operations; on the other hand, the Federal Reserve slows down its overnight reverse repurchase operations to release some liquidity and alleviate short-term liquidity tensions.