🚨 THIS IS WHY YOUR CRYPTO BAGS ARE DUMPING AND YOU NEED TO KNOW IT
It's not due to quantum FUD.
It's not due to the Fed being hawkish.
The biggest reason is the liquidity crisis!!
As we all know, liquidity crisis in the crypto market occurs when there's a sudden or severe shortage of available capital (buyers, stablecoin inflows, or market depth) to support normal trading, leading to amplified price swings, difficulty executing trades without massive slippage, and cascading effects across the ecosystem.Crypto is particularly vulnerable because it's a high-risk, high-beta asset class with thin order books especially outside major pairs like BTCUSDT, heavy leverage usage (perps, futures), and reliance on continuous inflows for upward momentum. Unlike traditional markets with central bank backstops, crypto has no built-in lender of last resort, liquidity can vanish quickly.
As of now, a massive amount of liquidity has been drained by the US Treasury to refill its TGA account.
In the past month, Treasury has sucked out almost $150 billion from the economy.
Now add an already weakening economy on top of a liquidity crisis, and we have a perfect recipe for risk-on asset underperformance.
And crypto is not the only thing that is being sold off.
All the Mag7 stocks have been down YTD in 2026, with a few of them down 12%-15% this year. Because, When Mag7/tech stocks rally (driven by AI hype, liquidity, or positive macro conditions like dovish Fed policy), BTC tends to rise alongside them.
So, does that mean the dump will continue?
Well, the TGA balance is already at $922 billion, and this has been the ceiling since the 2020 pandemic ended.
So until a pandemic or WWIII starts, the next step will be the TGA balance going down, which will inject liquidity back into the market.
On top of that, $150 billion in tax refunds will hit the market by March, which will bring more dry powder and could bring a relief rally.
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