Interesting thing started today....
US central bank, the Federal Reserve (Fed), has started the process of injecting a total of $26.3 billion into the market in stages. In the first stage, about $6.5 billion has entered the system. The entire operation will last for three weeks.
The interesting thing is that this kind of news actually changes the mood of the market a little. Because when additional dollars come into the system, many traders asume that risk assets - such as Bitcoin, altcoins or the stock market ..... can get a little breathing space. When liquidity increases, confidence in the market usually increases a little.
But this time the matter does not seem so simple.
On the one hand, the Fed is injecting liquidity, on the other hand, the strength of the dollar is still quite aggressive. Bond yields are also on the rise. These two things are usually not a very comfortable environment for the risk market. So now the question is ...... Will this liquidity really bring fresh momentum to the crypto market, or will it just be a short-term reaction?
Many have already started creating bullish narratives. “Money printer back”, “BTC going higher” are apearing again on the timeline. But looking at the chart, the market still doesn’t seem fully convinced. Especially Bitcoin is still moving below some important resistance zones. The market may not go into fully risk-on mode until there is a clean breakout. One more thing to remember..... The Fed usually does this kind of operation to keep the financial system smooth. It is not to directly pump crypto😅 But market psychology works differently. Traders often become aggressive just by hearing the word liquidity. I think the next few days are going to be interesting. If the liquidity effect improves market sentiment, even if it is short-term, then BTC and major alts can provide some relief move. But if dollar strength and yields continue to increse in the same way, then it may be difficult to sustain the upside.
Overall, the situation is a bit mixed.
On one hand, liquidity injection…..
On the other hand, macro pressure is still alive.
Now it remains to be seen..... which side the market gives more importance to🤔
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