People who missed out are regretting, while forward-looking funds have already quietly positioned themselves. This is the truth of the crypto market—it's always punishing those who react slowly.

Last night's market movement was indeed unexpected. Bitcoin suddenly surged with a large bullish candle, causing the entire market to boil over. Many only saw the news in the morning, realizing they missed this wave of gains and could only sigh at the candlestick chart.

In fact, this rally didn't appear out of nowhere. What's the behind-the-scenes driver? Weak economic data from the US. Where is the money flowing? Out of traditional financial systems and into risk assets—including cryptocurrencies.

I've been in this circle for several years, and today I want to discuss the logical chain behind this. Maybe it can help you avoid being caught off guard when the next opportunity arrives.

**Signals of the US dollar weakening**

Recently, the US dollar index has fallen to a one-week low. This isn't just minor technical fluctuation; it's the market digesting real economic signals.

The US labor market is beginning to loosen. Latest data shows increasing layoffs and a significant slowdown in new job creation. What does this mean? It indicates that the Federal Reserve no longer has sufficient reason to maintain high interest rates.

Just look at the futures market data—traders are significantly raising expectations for a rate cut in December, with the probability approaching 70%. This expectation itself is driving the dollar's depreciation.

**The tug-of-war relationship between the dollar and crypto**

Here's a classic inverse relationship: when the dollar is strong, global funding costs rise, and risk assets are usually suppressed; conversely, when the dollar weakens, funds seeking high yields tend to shift into high-risk assets like Bitcoin.

One indicator I’ve been watching is the usage of the Federal Reserve’s temporary liquidity tools. This number has recently dropped from $50 billion straight down to near zero. What does this indicate? The banking system is not short of cash; liquidity is ample. When banks are not short of money, they start to have the capacity to allocate to risk assets.

**What’s next**

If the Federal Reserve really begins to cut rates in December, what will happen? The dollar will continue to weaken, and the appeal of crypto allocations will rise. This is not just about coin prices but a broader adjustment in asset allocation patterns.

Institutional investors are gradually entering. They are not retail traders chasing hype but are making long-term allocations based on macroeconomic outlooks.

**Advice to everyone**

Instead of chasing the market up and down, it’s better to understand the driving forces. US economic data, Federal Reserve movements, and dollar trends—these are the real factors determining the direction of cryptocurrencies, not a statement from a big influencer or a piece of news.

When the next opportunity comes, I hope everyone can make decisions based on an understanding of the macro environment, rather than regretting after the market has already run away.