Bitcoin fell from the 102,000 range to the 95,000 range overnight, dropping 5,000 dollars. Looking back at history, from last weekend's "tulip bloom" to today's "withered", it has fallen 11,000 dollars within a week. Recently, I have mentioned multiple times that the second half of December will be the tightest phase for U.S. liquidity. At this time, Federal Reserve Chairman Powell clearly stated, "We are not allowed to have Bitcoin", which means that the Federal Reserve no longer harbors any illusions about Bitcoin, and the debt-laden U.S. government's plan to accumulate Bitcoin is almost impossible to realize.
Importantly, a set of special data emerged last night: the U.S. dollar index reached 108.3, the 10-year Treasury yield was 4.57%, and the 30-year yield was 4.74%, indicating that inflation expectations are rising sharply. In particular, the 30-year Treasury yield is only 10 basis points away from this year's peak, reflecting the market's tension.
Furthermore, Trump vetoed the $380 billion spending bill promoted by the House Speaker, arguing that the bill fails to address the U.S. debt ceiling issue. Trump's new plan is to extend the debt ceiling to 2027, significantly reducing the need for negotiations on the debt ceiling within the next three years.
However, Democratic leaders strongly oppose this proposal, viewing it as an extreme demand that reflects serious divisions within the party. In this environment, the risk of a government shutdown has sharply increased, with at least a 90% likelihood of a shutdown.
Trump's demand to eliminate the debt ceiling is puzzling, but it may suggest that he is prepared to continually push the debt limits in future governance. The current deficit has reached a historical high, and although the commitment to cut spending is loud, whether it can truly be realized remains uncertain, which has also led to unease in the bond market.
The impact on the market is profound, especially with the upcoming options expiration date. The tight liquidity and the possibility of a government shutdown put downward pressure on the prices of gold and silver. Gold has already fallen below 2,600 dollars, with the next target possibly in the 2,580-2,550 range. Silver also faces a similar situation, possibly dropping to the 29-28.5 range. Risks still exist, especially during U.S. trading hours.
Overall, the market is currently undergoing a severe adjustment, and investors need to remain vigilant.
