Tl;dr - The government won't actually give you money (mostly true), so if the full $4k would bring your actual taxes paid for the year below zero, you can't have it.
The CTC has nothing to do with daycare costs. Those 20-35% numbers are just an indication of what they intend by the credit. Daycare is a deduction though, so that's nice. Anyway, your number probably has something to do with the rest of your tax situation. Your refund can't bring your taxes owed for the year below zero.
My own case: I got the full $4k for my 3 and 4 year old this year. However, this has never happened before. In previous years I had other credits and deductions that quickly plummeted my taxes owed to zero. If you pay $10k in taxes during the year, your refund check can't exceed $10k (zero taxes paid). If that tax credit would put your refund check over $10k, that just can't happen, so you get it reduced. Technically, it's not the CTC anymore if that happens; it's the ACTC, which caps at $1400.
More reading if you're interested:
https://www.taxpolicycenter.org/briefing-book/what-child-tax-credit
