DON'T PANIC! Crypto Is Dropping for Only One Reason – Wait for the US to "Open Up", the Money Will Come Back

These past few days, both the crypto market and the US stock market have been deep in the red. Many newcomers are panicking, thinking that “the bad cycle has already begun.”

But the truth is much simpler: the US government has been shut down for 37 days—a record in modern history.

And when the US government “shuts down,” the entire global financial market is affected.

1. Why does a US government shutdown cause crypto to plunge? The two parties in the US couldn’t agree on a budget, leading to the government running out of funds to operate. At that point, the Treasury Department is forced to: 👉 Pull money from the market to maintain temporary cash flow. 👉 In just 2 months, they withdrew nearly $7 trillion from the system. To put it simply: Market = a lake Cash flow = water Treasury = a reverse pump Continuous pumping → the lake dries up → liquidity plummets. Resulting in: Banks running short on cash System-wide liquidity at its lowest since 2021 Short-term interest rates spike ( even higher than the rate currently set by the Fed ) In other words: The Fed lowers rates to inject money—while the Treasury sucks it all out → the market returns to its previous state of stress.

2. The market is extremely sensitive right now: just a slight shake and capital flees When liquidity is scarce: Risk aversion surges Investors want to hold cash Highly volatile assets like crypto are the easiest to “slam down” It’s not because crypto is bad. It’s not because the market is breaking trend. It’s simply because “there’s no money.”

3. So what should investors do right now? This is the most important part. ❌ 1. Don’t panic sell This drop is a technical decline due to liquidity, not because of any fundamental crypto issue. ❌ 2. Don’t rush to catch the bottom Liquidity hasn’t returned, so the market may swing a few more times. ✔️ 3. The right strategy: Hold your position – Wait for the US to reopen When the US government passes a budget: The Treasury stops pulling money Bank cash flow stabilizes Liquidity recovers New capital will flow into risky markets, including crypto At that point, prices will rebound strongly and clearly—it won’t be too late to get in after confirmation.

4. Final advice for newcomers If you’re feeling: Stuck in trading Lost or directionless Don’t understand why the market is moving this way Still don’t grasp how liquidity and macro factors affect crypto Then this is the phase where you should observe more, act less. The market doesn’t leave anyone behind. What matters is stepping in at the right moment.