On January 30, 2026, Arthur Hayes published an analysis of U.S. dollar liquidity on X, coinciding almost perfectly with a new round of deep corrections in Bitcoin. The report focused on the withdrawal of approximately $300 billion in dollar liquidity from the market over the past few weeks, as well as a rise of about $200 billion in the Treasury General Account (TGA) balance, which has drawn significant attention from the crypto community. As macro funds recede overall, and the "faucet" of central banks and fiscal policy tightens, the simultaneous expiration of billions of dollars in BTC and ETH options has led the market to question: Is this price plunge a "technical correction," or a systemic pressure release resulting from the retreat of dollar liquidity and the resonance of derivative leverage?
$300 Billion Liquidity Exit: The Water Level of the Fund Pool is Declining
● Liquidity Reduction Pace: According to various data sources, the observable scale of dollar liquidity in the U.S. market has shrunk by about $300 billion over the past few weeks, not due to a single-day "flash crash," but as part of a continuous withdrawal process accompanying fiscal operations and balance sheet adjustments. For global risk assets that heavily rely on the dollar credit environment, this means that the "water level" for trading and allocation has been overall lowered, putting passive reduction pressure on assets that originally depended on liquidity overflow.
● Implications of TGA Fund Recovery: During the same period, the balance of the U.S. Treasury General Account (TGA) rose by about $200 billion, indicating that this portion of funds could have remained in the banking system or market but was locked back into the "Treasury account" by the Treasury. From a market perspective, this removes a layer of liquidity from the balance sheets of commercial banks and financial institutions, meaning that funds will no longer participate in asset purchases or financing expansions in the short term, equivalent to "tightening the belt" for the market.
● Pool Water Level Analogy: If we imagine global funds as a large pool, the operations of central banks and fiscal policy are like controlling the inflow and outflow gates. At the current stage, the inflow rate has slowed or even narrowed, while the rapid "water storage" of the TGA is akin to opening a new outflow, causing the overall water level to decline. In this broader context, not only are tech stocks and growth stocks under pressure, but even precious metals and high-beta crypto assets, which are often seen as hedging tools, are passively exposed to "reefs" as the water level declines.
Hayes' Alarm: Bitcoin and Dollar Liquidity are Tied Together
● The Argument for Synchronous Decline: In his latest report, Arthur Hayes bluntly stated, "The decline in Bitcoin prices is highly synchronized with the decrease in dollar liquidity," viewing BTC as an asset extremely sensitive to dollar liquidity. His narrative is not about short-term emotional fluctuations but points to a longer-term relationship: when dollar liquidity expands, BTC often enjoys the benefits of incremental funds; when liquidity is withdrawn, Bitcoin is the first to be liquidated and reduced in allocation.
● Temporal Overlap Rather than Exact Correlation: From the market performance over the past few weeks, Bitcoin experienced a significant phase correction in late January, which coincided with the reduction of about $300 billion in liquidity and the $200 billion increase in TGA balance. Currently, public information is insufficient to provide precise correlation coefficients or mathematical models, but this sequence of "first withdrawing water, then dropping prices" has led to the view of BTC as a liquidity barometer spreading further among investors.
● "Not Surprising" Market Interpretation: In the Chinese community and media's retelling, "This round of correction is not surprising" has become an amplified footnote to Hayes' viewpoint. Some institutions and traders emphasize that if one shifts the perspective from daily candlesticks to macro liquidity, the current price fluctuations resemble a concentrated outflow of previously crowded trades under the pressure of liquidity contraction, representing a necessary repricing of funds in response to environmental changes, rather than an incidental shock from a single piece of negative news.
Options Expiration Pressure: $7.6 Billion and 435,000 Contracts of Leverage Test
● Concentrated Expiration Volume: According to data from a single source, on the same trading day, approximately 91,000 BTC options were set to expire, with a nominal value of about $7.6 billion, along with around 435,000 ETH options expiring simultaneously. This massive single-day options expiration event itself is enough to act as a volatility amplifier, and in an environment where liquidity is already declining, its marginal impact is further magnified.
● Leverage and Volatility Amplification Mechanism: When such a large volume of options expires near key price levels, market makers and institutions need to continuously hedge dynamically, and spot and futures positions will be forced to adjust based on Delta and Gamma exposure. Once the underlying price approaches a large execution price range, it can easily trigger a chain reaction of forced liquidations, position reductions, and re-hedging cycles. Although reliable data to depict specific clearing amounts is currently lacking, it is certain that participants with higher leverage and thinner margins are more likely to be swept out during such time windows.
● Dual Pressure of Macro and Derivatives: Placing the contraction of macro liquidity alongside the concentrated expiration of options creates a typical "double bind" scenario: Above is the funding ceiling brought about by tightening dollar liquidity, and below is the leverage minefield triggered by options expiration. The former limits new buying and support, while the latter accelerates passive selling during price fluctuations, and the combination of both subjects the already fragile market structure to extraordinary selling pressure in a short time.
Comparison with Silver and Traditional Markets: Risk and "Quasi-Hedging" are Being Withdrawn
● Precious Metals Under Pressure: Observing the performance of traditional markets during the same period, not only did typical risk assets like growth stocks experience adjustments, but some precious metals like silver also showed signs of price pressure. This situation where silver and high-volatility assets "decline together" indicates that when dollar liquidity is overall withdrawn, even assets considered "quasi-hedging" or stores of value struggle to remain completely insulated.
● The Shared Fate of Being "Withdrawn": From the perspective of fund flows and market sentiment, Bitcoin and silver during this round of dollar contraction have shown more of a "passively withdrawn" state, rather than being hit by single-point attacks due to their own fundamentals or regulatory news. Investors tend to reduce various positions during tight funding, whether speculative or hedging positions, resulting in multiple asset classes facing simultaneous selling pressure, with price performances reflecting each other, rather than one dragging down the other.
● High Beta Label and Sensitivity Amplification: In the eyes of many traditional institutions, crypto assets are still classified as high-beta risk assets, meaning they tend to rise more during market upswings and often experience larger declines during pullbacks. Because of this risk amplification property, when macro liquidity undergoes marginal changes, institutions are more inclined to prioritize cutting such positions to release margin or recover cash, making BTC, ETH, and others particularly sensitive to changes in the funding environment, acting as accelerators of liquidity sentiment rather than safe havens.
Short-Term Chill and Mid-Term Suspense: The Market is Waiting for the Next Round of "Water Release"
● "Waiting for Liquidity" Market Statement: The expression that "BTC is waiting for new liquidity to enter" should currently be viewed as a market perspective and a hypothesis to be validated, rather than an ironclad rule fully proven by data. Supporters believe that as long as the next round of global dollar liquidity expands again, Bitcoin is expected to once again play the role of a highly elastic risk exposure; however, this judgment relies on future policy paths and cannot simply extrapolate the current market situation.
● Potential Paths for Future TGA Consumption: Mechanically, if the Treasury increases spending or adjusts its debt issuance structure in the future to consume the TGA account balance again, it would theoretically release some of the funds previously locked in the "Treasury" back into the banking system and market. However, public information is insufficient to support responsible predictions regarding specific time points and scales, and this path of "water returning to the pool" currently remains at the level of possibility rather than certainty.
● Long and Short Tug-of-War Around Macro: At the macro level, the bullish camp bets that easing will eventually return: fiscal deficits, high debt, and economic pressures will ultimately force policies to shift back toward easing, at which point crypto assets will benefit again. The bearish or cautious camp worries that fiscal constraints, political games, and inflation shadows may prolong the "water withdrawal" cycle, or even exacerbate it, keeping high-beta assets in a high-pressure environment for an extended period. In such an uncertain range, each round of price rebound and correction appears more like pricing the probabilities of future policy paths rather than a simple technical chart game.
Lessons Learned from This Round of Correction: Watching the Water Level is Better than Watching the Market
● Dual Resonance Behind the Correction: This round of Bitcoin's decline is more like a reflection of the resonance between dollar liquidity contraction and concentrated options expiration, rather than an isolated accident triggered by a piece of negative news. The withdrawal of approximately $300 billion in liquidity, the $200 billion siphoned off by the TGA account, and the expiration of billions of dollars in nominal value of BTC and hundreds of thousands of ETH options have created a "magnifying glass" window in time, allowing the market to see how macro water level changes penetrate on-chain prices and derivative structures.
● Observation Focus for the New Cycle: For future cycles, merely focusing on price candlesticks and single indicators is insufficient to explain the violent fluctuations in the crypto market. Liquidity indicators like TGA balance, the operational rhythm of major central banks and fiscal policies, as well as the distribution of large options and futures expirations, are becoming essential "core courses" for understanding market trends. For professional investors, building their own macro-derivative calendar library may be more forward-looking than simply tracking spot prices.
● Finding Balance Amid Water Level Fluctuations: Before the regulatory, fiscal, and liquidity games are fully defined, the crypto market will continue to be pushed forward by the constantly changing "water level." Once liquidity flows back in, the high-beta characteristics may allow Bitcoin and Ethereum to charge ahead again; if the withdrawal extends, the market must also learn to control positions and leverage in shallower pools. For all participants, the lesson left by this round of correction may not be panic, but an advanced lesson on how to understand changes in water levels.
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