The Christmas holiday is approaching, and market volatility is intensifying. Recently, many people have been debating a question: should I liquidate now or try to buy the dip? The answer is actually simple—no need to fully liquidate, and don’t even think about bottom-fishing. Behind this wave of market movement, bearish forces are positioning themselves, and savvy investors have already begun to quietly reduce their holdings.

To understand the current market, you first need to grasp the true meaning of liquidity exhaustion. Many newcomers mistakenly believe that poor liquidity equals low volatility, but that is a huge misconception. On the contrary, in a low-liquidity environment, even minor capital movements can be wildly amplified. A single negative news can trigger panic selling, causing prices to plummet instantly; conversely, a small amount of capital can temporarily push prices up, but that’s just a fleeting illusion. Once funds start to flee, the decline can become even more severe. It’s like stirring ripples in a dried-up pond—the waves are larger, but they can’t last long.

Adding to the current macro environment, the Federal Reserve’s repurchase agreement plans have temporarily alleviated liquidity pressures, but the long-term tightening of liquidity remains unchanged. It’s important to note that the correlation between the crypto market and the US stock market remains strong. After US stock markets close, funds lose their traditional safe haven, and some money will be pulled out of the crypto market, further increasing downward pressure.

What’s more, the divergence in performance between Bitcoin and gold is worth paying attention to. Gold’s safe-haven attributes are regaining favor, and funds are quietly shifting towards it. This signal should not be ignored.