The spread between the 10-year and 3-month U.S. Treasury yields—an indicator often dubbed the "Financial Crisis Predictor"—is sending an unmistakable warning signal. From long-term inversion to the spread turning positive, and then to continuous acceleration, this pattern has historically always triggered a crisis. The dot-com bubble in 2000, the subprime mortgage crisis in 2008, and the market plunge during the COVID-19 pandemic in 2020 all followed this pattern.

**The True Meaning Behind the Surge in Yields**

The abnormal performance of U.S. Treasury yields essentially reflects the market’s vote of no confidence—doubting U.S. creditworthiness. Normally, the Federal Reserve lowering interest rates should reduce borrowing costs, but in reality, yields on 10-year and 30-year Treasuries have surged against the trend, remaining high for months before the rate cuts. Investors’ logic is straightforward: the risk of lending to the U.S. is increasing, and they won’t buy in without higher returns.

What does this shift imply? Treasuries used to be the "risk-free asset" anchor of the global financial system. The surge in their yields is like a warning bell for the entire financial market—credit foundations are shaking. Wall Street’s big players are accelerating their sell-off of Treasuries, moving away from what was once considered a "safe haven."

Even more concerning is that this is not an isolated signal. Currently, market leverage has reached historical peaks, U.S. stock valuations are approaching all-time highs, and all key indicators are flashing warning signs. Even if a full-blown financial crisis does not erupt by 2026, the probability of an economic recession is almost certain sooner or later.

**On-Chain Funds Are Telling the Truth**

Fund flows in the crypto market rarely lie. In early December, Bitcoin’s on-chain sell-off volume broke previous records, even surpassing levels seen during last year’s bull market. This indicates that institutions and large investors are collectively reducing their holdings, and signs of capital fleeing are already very clear.