Brothers, did you see that sharp rise last night around 11 PM? BTC surged nearly 5% in half an hour, and many altcoins followed suit, leaving the market in a daze. Stop guessing; the reason is not in the candlestick chart but in the conference rooms of Wall Street — the Federal Reserve may be forced to 'open the floodgates' early, and smart money has already started to run!
1. The source of the storm: the banking system is running out of 'cash'.
Recently, major Wall Street firms (Citigroup, Bank of America, etc.) collectively sounded the alarm: the 'money shortage' among American banks has approached a critical point. The core reasons are two-fold:
The Federal Reserve is tightening too much: quantitative tightening (QT) is draining liquidity, bank reserves have dropped to a four-year low, nearing the dangerous line of $3 trillion.
The Treasury is crazily issuing bonds: Treasury supply is surging, major banks have to dig into their pockets, further draining cash from the market.
Result? Interbank borrowing rates have soared, the liquidity pipeline is about to burst—a "perfect storm" is pressuring the Federal Reserve.
Two, the Federal Reserve's "dilemma": Anti-inflation or save the market?
Now the Federal Reserve has only two paths left:
Stubbornly fighting inflation: Continue to reduce the balance sheet, but it may trigger a collapse of the financial system;
Turning to easing: Restart quantitative easing (QE), and buy bonds to inject liquidity.
The signal is clear: The Federal Reserve has secretly injected $125 billion into the market over the past 5 days (the largest scale since 2020), and officials hint that "we need to start buying assets."
In simple terms, "buying assets" = turning on the money printer. Once implemented, it will be a replay of the massive easing in 2020—back then BTC surged from $3,800 to $69,000, what about this time?
Three, what does it mean for the crypto world? Liquidity is oxygen!
Short-term sentiment repair:
Last night's rise was an expected sprint, but leverage liquidation has not yet cleared (after the October flash crash, market makers still have a $20 billion funding gap), the market may fluctuate repeatedly. Don't chase the highs! Wait for pullbacks to position in batches.
Medium-term trend confirmed:
If the Federal Reserve shifts its stance this week (especially focusing on the wording of "balance sheet"), combined with the halving effect in April next year, BTC is expected to break through its previous high of 126,000 and move towards the range of 150,000 to 200,000.
Long-term logic strengthening:
Trump's policies are friendly (reportedly considering buying 1 million BTC within 5 years), institutions are continuously increasing their holdings through ETFs (BlackRock IBIT alone holds 780,000), with scarcity and liquidity driving the market, the bull market ceiling may far exceed expectations.
Four, my strategy: Keep a close eye on the signals, don't get thrown off the bus.
Key point: This week's Federal Reserve meeting! Any hints about "liquidity support" or "asset purchases" will be heavy catalysts.
Position management:
Mainstream coins (BTC/ETH) account for 70%, altcoins should be cautious (liquidity has dried up, depth is poor and easily crushed);
Hold cash, if it drops below $100,000, consider adding in batches.
Psychological preparation:
The market is still fragile (ETF funds recently had a net outflow of $4.9 billion), but when the liquidity flood comes, holding core assets is the key to winning. Panic selling is the biggest risk!
Final reminder:
What’s played in the crypto world is expectation. Last night was just a rehearsal; the real show depends on whether the Federal Reserve turns on the "tap." Remember, during the easing cycle, holding spot assets is more profitable than short-term trading. Follow me for real-time updates on Wall Street trends—this time, don’t fall behind!
Follow Xiang Ge to learn more first-hand information and cryptocurrency knowledge at precise points, becoming your navigation in the crypto world; learning is your greatest wealth!
