Cryptocurrency is in dire straits. After the cryptocurrency market falls, the US stock market falls again, and after the US stock market falls, the cryptocurrency market continues to decline. This round is essentially a sequential pricing of the same liquidity tightening at different risk levels. Geopolitical conflicts have pushed up oil prices, while inflation stickiness has reversed expectations for monetary policy: the market's pricing for a rate hike this year has risen from 60% a week ago to 85%, and expectations for a rate cut have largely cleared. In an environment where risk-free interest rates are rising and liquidity margins are tightening, funds are withdrawing from the outside to the inside along the risk curve, with high beta assets bearing the brunt. As the only subject of 24-hour continuous trading, it often becomes the preferred liquidity outlet for institutions to adjust their exposure when traditional markets are closed and risk events have not been fully priced. Bitcoin's leading decline does not reflect a deterioration in its own fundamentals, but rather its functional role as a liquidity buffer in the portfolio. What is more noteworthy is the self reinforcing mechanism of its decline. The current encrypted callback is dominated by two types of negative feedback: One is the leverage liquidation on the derivatives side, where price breaks trigger forced liquidation and form a chain effect. On June 3rd, the daily liquidation scale reached 1.8 billion US dollars, with long positions accounting for 1.35 billion US dollars; The second is the redemption pressure on the ETF side. The Bitcoin spot ETF has had a net outflow of $4.4 billion for 13 consecutive trading days, with BlackRock IBIT contributing about 75%. Redemptions directly translate into spot selling pressure. Combined with the reduction of holdings by core holders such as Strategy, market confidence has simultaneously weakened, and Bitcoin has nearly halved from its high of $126200 in October last year. The structure of mutual feeding between price decline and deleveraging determines that the pullback of cryptocurrencies is usually deeper and the repair is weaker. Follow up judgment focuses on three variables: 1. The trend of oil prices determines the path of inflation and the space for interest rate cuts. On June 16-17, the first FOMC meeting chaired by Walsh set the tone and decided on the direction of expected interest rate hikes. The turning point of cryptocurrency ETF fund flow from net outflow to net inflow is a leading signal for risk appetite repair.