In the midst of strategizing, we decide the outcome from a thousand miles away. Hello everyone, I am Lin Chao, a global financial market observer, focusing on cryptocurrency market analysis, bringing you the most in-depth trading information analysis and technical teaching.

Yesterday, I clarified the current overall situation and my personal judgment. As expected, the index continued to plummet early yesterday morning, and the reason was clearly communicated: it was fundamentally due to the unprecedented government strike that drained liquidity.

This directly led to investors' pessimistic expectations regarding the U.S. government shutdown. Voting began at 00:30 Beijing time on November 5, and the result was the Senate's 14th rejection of the Republican-led temporary funding bill, with no set time for a re-vote. Currently, predictions on Kalshi indicate that the U.S. government shutdown could last for 44 days, meaning there are still 9 days to go. The most immediate impact is that food stamp relief will only continue after Trump announces the reopening of the government, which may increase social unrest. Data from the Bureau of Labor Statistics will also be released only after the government shutdown ends. The Department of Transportation warned that if the shutdown continues and controller shortages persist, some airspace may be forced to close or traffic may be restricted next week.

This series of chain reactions directly created a global "Black Tuesday," with a comprehensive decline in global financial markets. South Korea's market hit a circuit breaker, with the KOSPI index dropping by 4%. In Japan, the Nikkei 225 index fell by 2%. In the U.S. stock market: the Dow fell by 0.53%, the Nasdaq dropped by 2.04%, and the S&P fell by 1.17%, marking the largest drop for both the S&P and Nasdaq in a month. Bitcoin briefly fell below 100,000, and the fear and greed index entered the panic zone, dropping to 20, indicating that the market is nearing a short-term bottom.

Lin Chao's Summary

Reflecting on the extreme market conditions on April 7 this year, it was also a sharp decline in U.S. stocks that triggered political pressure, ultimately forcing Trump to compromise in tariff negotiations and achieve a temporary ceasefire. The current situation is quite similar; Wall Street's panic is not merely an emotional fluctuation but a real vote against "fiscal vampirism + political dysfunction." Once the market sell-off evolves into a wealth effect backlash, such as pension accounts shrinking and rising polling pressures, Trump's team often quickly shifts to a pragmatic approach: stabilize the market first, then discuss principles. The longer the shutdown lasts, the greater the political pressure.

Market funds are gradually fleeing risk assets due to panic, seeking high cash flow, which has even led to a drop in gold prices, an increase in the dollar index, and a decrease in U.S. Treasury yields. The market has re-entered a phase where "liquidity is more important than returns." In this environment, investors are more inclined to hold cash and short-term government bonds, with a clear decline in risk appetite. Growth assets and high-leverage sectors face passive selling pressure, while corporate financing, credit expansion, and trading activities also slow down. If the shutdown continues to extend, and macro data remains in a "lights out" state, short-term funds will become more cautious, and risk indicators like the VIX may remain elevated, leading to an exaggerated market reaction to the Federal Reserve's policy path and increased volatility.

The simple conclusion is that the failure of the 14th vote has resulted in the longest shutdown in history, and market pressure is beginning to increase. Currently, both parties should accelerate efforts to end the shutdown, with a consensus potentially reached within this week, allowing the government to resume operations next week.

Returning to the market itself, liquidity is severely depleted, and my own spot holdings have basically retraced by over 40%. Fortunately, I hedged at a critical moment, effectively preserving the risk of capital loss. I believe many of you have also exhausted your ammunition. Friends who have long followed Lin Chao should know that I have always had a habit of hedging. Many fans have privately messaged me, asking how to hedge, feeling that they can't operate and find it troublesome. Simply put, it means not cutting losses on the spot holdings but using contracts to short the market when there is a directional change. Once the market stabilizes, the profits from shorting can be reinvested into spot holdings, not only preserving capital but also increasing stakes after the market rebounds. These are actually basic operations in the capital market, but many ordinary investors do not utilize them, and many find it troublesome and are unwilling to learn. However, if you do not invest effort into learning, you will be ruthlessly harvested by the market. No one is a philanthropist; there is no easy money in any market. If you don't know how, seek advice from those who have achieved results.

In response to the liquidity exhaustion in the market and the impact of the government strike on the financial market, I will write a more specialized analysis and forecast later. If you are satisfied with my writing, feel free to share and comment to help those who are currently confused.

The success of investment depends not only on choosing good targets but also on when to buy and sell. Preserving capital and making good asset allocations are essential for steady progress in the ocean of investment. Life is like a long river flowing into the sea; what determines victory or defeat is never just the gains and losses of a single pass or a moment in time, but rather a well-thought-out strategy followed by action, knowing when to stop and what to gain.

The global market is ever-changing, and the world is a whole. Follow Lin Chao to gain a top-tier global financial perspective.

This article is merely a personal opinion and does not constitute any trading advice. The cryptocurrency market is risky; invest with caution!

For real-time consultation, feel free to follow the public account: Lin Chao on Cryptocurrency.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。