Hey, everyone! When I just saw the news that the Federal Reserve is going to conduct a 6.8 billion dollar repurchase, I almost spilled my coffee on the keyboard. Is this old guy starting to 'open the floodgates' again? Don't rush to shout 'the bull is back, quick return', and don't panic to liquidate and run. Today, let's break this down in plain language with solid facts, and I'll share some of my heartfelt opinions. Those who understand can avoid taking detours for six months!
First, let me share a little knowledge for new followers, while old followers can skip to the main points: A repurchase agreement is essentially the Federal Reserve temporarily lending money to the market, using high-quality assets like government bonds as collateral, and then collecting them back at maturity. In simple terms, when the market is short on cash, the Federal Reserve hands over a 'short-term wallet' to get funds circulating. The recent scale of 6.8 billion is not particularly large, but the key lies not in the amount, but in the 'timing' and 'signal significance'. Recently, the global financial market has been a bit 'tight'; the U.S. stock market is fluctuating, government bond yields are rising, and the cryptocurrency market is experiencing wild swings. At this moment, the Federal Reserve's intervention clearly aims to 'stabilize' the market.
Here comes the key point! Is this good or bad for the crypto market? My view can be summed up in four words: short-term pain relief, long-term pressure. Why do I say this? First, in the short term, the Federal Reserve’s liquidity injection will alleviate the market's 'money shortage anxiety'; those funds trapped by leverage will get some breathing room, and the crypto market will likely follow with a small rebound, after all, capital always chases profit, and wherever there is liquidity, it will flow there. But don’t celebrate too early; this 6.8 billion is 'temporary borrowing', not a 'free gift', and it must be paid back when due. It’s like giving the market a sip of 'sugar water'; it’s sweet for a moment but doesn’t solve the fundamental problem.
To put it deeper, the Federal Reserve's repurchase operations essentially respond to the current liquidity tightness, which reflects the weakness of economic recovery. If the economy were really good, the market would have enough funds to circulate on its own, without the need for the Federal Reserve to intervene. Although the crypto market claims to be 'decentralized', it is still influenced by the global macro economy. Economic weakness leads to a decline in investors' risk appetite, and ultimately, funds will still be withdrawn from high-risk crypto assets to buy safer assets like government bonds and the US dollar. Therefore, the rebound brought by this repurchase is more like a 'trap to lure in buyers'; don't get carried away by the excitement of chasing highs, or you could easily become a 'bag holder'.
Here’s a side note: every time the Federal Reserve takes action, someone in the market shouts, 'A big bull market is coming!', and it really makes me want to laugh. These people either don’t understand the operational logic of the Federal Reserve or are deliberately misleading novices to take over. Remember one thing: the core goal of the Federal Reserve is to stabilize the economy and inflation, never to boost the crypto market. A bull market in crypto needs sustained, long-term liquidity injection, not this kind of 'temporary patching' operation.
Finally, here’s a practical suggestion for everyone: In the next few days, focus on the strength of the market rebound. If the trading volume doesn't keep up during the rebound, decisively reduce your positions and observe; if you have low-position assets, don’t be greedy, take the opportunity to take partial profits during the rebound; securing profits is always the way to go. Don’t think about bottom-fishing at the lowest point, and don’t think about escaping at the highest point. If you can capture the profits in between, you’ve already outperformed 90% of people.
Alright, that’s it for today’s analysis. How much do you think this round of operations by the Federal Reserve will make the crypto market rebound? Are there any family members who have already laid out their positions in advance? Leave a comment in the discussion area to share your views.
Follow me@加密崎哥 #美国非农数据超预期 $BTC
