Yesterday, the financial markets experienced a 'massacre'. Silver futures plummeted by 31% in a single day, marking the largest single-day drop since 1980, while spot gold also fell nearly 10%. If you are still looking at K-lines for support, you are gravely mistaken. This crash is not a simple technical correction, but a severe reset of macro logic.
Silver plummeted 31% in a single day, setting a 46-year record
Why the crash? The core reason has only one name: Kevin Warsh.
The market had been immersed in the illusion of the 'Trump trade', assuming that the new government meant lower interest rates and unlimited liquidity release. However, Trump's nomination of Kevin Warsh as Federal Reserve Chairman directly shattered everyone's fantasies. Warsh is known as a 'hawk', and his rise to power means that the Fed will prioritize controlling inflation rather than endless monetary easing. The market's expectation of a 'rate cut wave' instantly turned into 'higher interest rates for a longer period (Higher for Longer)'.
The logical chain is very clear:
Hawkish rise -> Bond yields soar -> Dollar index violently rebounds -> Valuation reconstruction of non-interest-bearing assets (gold and silver).
Moreover, the market before the crash is already extremely crowded. Gold and silver have previously set historical highs, and institutions have substantial profit margins. When news from Warsh ignites panic, the highly leveraged silver market is the first to experience a stampede. Once key support levels are breached, stop-loss orders and margin call instructions pour out like an avalanche, which is why the drop in silver is much greater than in gold—this is not only a retreat of risk aversion but also a liquidity crisis.
What does this mean for the crypto market?
Many people in the crypto circle are still relieved that $BTC has not been cut in half like silver. Don't celebrate too early. The sharp decline in gold and silver is essentially a signal of 'liquidity contraction'. $BTC, as 'digital gold', finds it hard to stand alone in the context of tightening macro liquidity.
If traditional funds face a margin shortfall due to the sharp decline in gold and silver, they will not hesitate to sell the most liquid risk assets to fill the gap, with $BTC and $ETH often being the preferred ATMs.
The next script prediction:
In the short term, the market will fall into extreme panic over a 'hawkish Federal Reserve', with cash (USDT/USDC) temporarily reigning supreme. Do not try to catch the 'silver flying knife' that is still falling, nor blindly believe that the safe-haven properties of $BTC will take effect immediately.
Where are the real opportunities?
Wait for the panic to fully release. If Kevin Warsh's policies lead to rising recession expectations, the Federal Reserve will ultimately be forced to pivot. But before that, the market must first undergo a painful round of deleveraging.
When safe-haven assets no longer provide safety, have you left enough $USDT in your positions to buy the dip? Or are you fully loaded, hoping for a rebound?