2025-12-26 01:26:00

The Federal Reserve's "tug-of-war" reappears, Christmas market under the shadow of QE4: Bitcoin's "Ice and Fire" Double Extremes

Brothers, this round of the Federal Reserve's operations has truly left everyone stunned. On one side is "constipation-style liquidity injection"—a single-day spree of 6.8 billion on December 22, totaling 38 billion over 10 days; on the other side is "muscular liquidity withdrawal"—reverse repurchase agreements (ONRRP) exceeding 13.5 billion in a single day. This scene is like drinking beer while scratching your throat—nothing left after, just ceremonial. But the truth is far more surreal; this "liquidity scam" is reshaping the underlying logic of the entire financial market.
1. "Liquidity injection + withdrawal": The Fed's split personality game
This story starts at the source. The U.S. government shutdown for three months, with national debt soaring by 700 billion dollars, directly turning the interbank market liquidity into a "desert." Small banks face skyrocketing borrowing costs, real economy loans become nearly impossible, and citizens' wages have shrunk for three consecutive months—typical of "champagne on top, cigarette butts below."
But does the Fed just sit idly? Of course not. It launched the Bank Term Funding Program (BTFP), essentially a "cloak" for QE. Citi strategists have long exposed this: "The Fed's new BTFP is just another name for QE; banks' reserves at the Fed will increase, technically no securities are bought, but the effect is identical."
Even more cunning is "precise watering." The Fed supports the financial markets by injecting liquidity while using reverse repos (ONRRP) to drain excess liquidity. This isn't schizophrenia but the ultimate expression of "both want and need": maintaining financial system stability while controlling inflation expectations; providing blood to Wall Street while preventing a flood of dollars from hitting small shops on the street. The result? Liquidity flows into the S&P 500 and gold (up 68% in a year), while the real economy's fields crack and dry.
2. Bitcoin's "sickly market": the tug-of-war between fear and greed
This "liquidity scam" has directly caused the crypto market to enter a "sickly market" phase. The Fear & Greed Index drops to the extreme fear zone at 25, but on-chain data hides clues:
• Stablecoin reserves are full: $230 billion in stablecoins lying on-chain, ready to launch a charge at any moment
• Technical critical point: Bitcoin repeatedly bounces near the $89,000 resistance; once it stabilizes above $90,000, the next target is directly $93,000
• Policy hedging: The new head of the China Securities Regulatory Commission + Biden's administration treating crypto as a cash machine, turning political risk into a "safety cushion"
The question is: why, with ample liquidity, does the market seem to catch a flu and stay in bed? Because smart money is waiting for the Fed to reveal its hand. It's like the night before an "all-in" on the poker table—everyone is watching the opponent's last card.
3. The ghost of QE4: a "Schrödinger's" prediction for the Christmas rally
The hottest question now: has QE4 secretly started? According to Futu NiuNiu statistics, since 1969, the Christmas market (last 5 days of the year + first 2 days of the new year) has averaged a 1.3% rise in the S&P 500. But this year, the pattern might be broken.
Two scenarios:
Gentle version: monthly purchase of 40 billion in government bonds, precisely filling liquidity gaps. Risk assets (including Bitcoin) can get a sip, but not a full meal. Under this, the Christmas rally is likely to be "lukewarm," with small gains but no wild celebrations.
Aggressive version: monthly spending of over 60 billion, flooding the market. Wall Street will pop champagne, and Bitcoin might follow stocks to new highs. But the cost is exploding inflation expectations and a potential credibility crisis for the Fed.
Crypto insiders' view: when the Fed itself is caught in a tug-of-war, with inconsistent signals, the traditional game rules are shattering. This Christmas, the "must rise" assumption for the market is likely to be broken because liquidity distribution mechanisms have already become distorted—water is in the pool, but the leading asset is clenched tightly by Wall Street.
4. Keep an eye on these two "soil indicators," don’t be naive
The Fed's moves are opaque to the public, but we can observe phenomena:
1. Reserve ratio: can it return to a safe level (usually above 12%)? This determines whether small and medium banks still have "reserves" to support real economy lending.
2. ONRRP balance: is it close to drying up? Currently, the ONRRP scale remains high, indicating that liquidity isn't actually "lacking," but funds are just rotating between banks.
Simply put: decreasing ONRRP + rising reserves = gentle QE4; collapsing ONRRP + soaring reserves = aggressive QE4. The current situation is both high and fluctuating, showing the Fed is also feeling its way forward.
5. Practical advice for brothers
Short-term (late December - early January):
• Lighten up for the holidays: Christmas market is highly uncertain, don’t go all-in betting on big moves
• Watch the 89,000 level: break and hold can be a signal to add small positions; break below 85,000 and cut losses decisively
• Hedge against rate hikes: historically, Japanese rate hikes → Bitcoin retraced about 15%, keep some bullets ready
Mid-term (Q1 2026):
• Stablecoin trends: $230 billion in stablecoins is "dry tinder," waiting for a spark (policy favorable news or technological breakthroughs)
• SEC new leadership: in Biden's era, regulation may shift from "tightening openly" to "tightening secretly," facilitating institutional entry
Long-term:
• QE4 will eventually land: regardless of its name, under economic recession pressure, the Fed will inevitably step in to buy government bonds. This is the ultimate bullish factor for Bitcoin, but the path will be winding.
Conclusion: Finding certainty in a scam
Brothers, history doesn't simply repeat, but it often echoes startlingly. QE in 2008 gave birth to crypto gold; QE3 in 2020 directly ignited institutional bull markets. Today’s "constipation-style liquidity injection" is ugly but clear in direction: the underlying logic of the financial system has collapsed, and the gap between traditional assets and crypto assets is deepening.
This Christmas, instead of betting on market ups and downs, think about one question: when the Fed's "firefighting water pipes" and "water pump" are both working, are your assets in a swimming pool or in a desert?
Brothers, how long do you think this Fed "tug-of-war" can last? Will QE4 be officially announced in 2026? Leave your judgment in the comments! If you find this analysis reliable, like and share to let more brothers understand this grand chess game! For real-time on-chain data monitoring, remember to follow the Crypto Gold Digger. See you next time as we continue to uncover the Fed’s secrets!

BTC1,54%

IllusionLittleFlyingHero

2025-12-26 01:03:52

Why are prices trending downward? Why is the rebound weak? Why are ETFs flowing out? It clearly predicts that by 2026, we will face a battlefield entirely different from the past.
#加密市场小幅回暖 #2026行情预测

Every bull and bear cycle is not just a price rotation but a complete reshuffle of market-driven narratives, capital structures, and volatility paradigms. We are at such a historic turning point—the "generational shift" in market logic.

1. Short-term (Christmas period): This is a "liquidity vacuum" options hunting ground, not a trend starting point
In late 2018 and 2022, we all experienced this "holiday effect." The market features:
1. Fake breakouts are rampant: Due to shallow depth, small amounts of capital can create the illusion of breaking through key resistances, tempting chasing and panic selling, then quickly reversing.
2. Volatility compression and delay: Prices seem frozen, but this is only the calm before the storm. All suppressed volatility caused by low liquidity will be released around major options expirations (December 27) or institutional re-entry (early January), leading to intense one-way swings.

Current operational advice:
Absolutely do not engage in trend trades based on "breakouts" or "breakdowns" within the narrow range (BTC 86.5k-92k, ETH 2.94k-3.18k) at this time.
Possible actions: “Perception position” limit orders (e.g., BTC 81.5k, ETH 2.75k, UNI 5.4). If the market experiences extreme spikes due to options expiry or liquidity drought, these low-level orders are prepared for such moments. They allow you to acquire bloodied chips when no one is watching.
Core discipline: Stay observant and let the market perform. Your task is not to participate in this chaotic short fight but to protect your capital and wait for the dust to settle.

2. Long-term (2026 outlook): This is a paradigm revolution of “the old gods abdicate, the new kings ascend”
The core logic driving the crypto bull market over the past two years—the “loose liquidity expectation”—has faded. The market is painfully adapting to a new paradigm where “liquidity marginally tightens, and growth depends on real demand.”
Resonance of three bull-bear cycles:
2013-2014 cycle: Narrative was “peer-to-peer electronic cash,” driven by Mt.Gox and retail investors. After the bubble burst, the market found that the “payment” narrative was invalid, entering a long value discovery phase.
2017-2018 cycle: Narrative was “world computer” and ICOs, driven by global retail hot money. After the bubble burst, the market found most applications were castles in the air, entering a “construction period.”
2020-2022 cycle: Narrative was “institutionalization” and “unlimited QE,” driven by global central banks’ liquidity injections. After the bubble burst, the market realized that “institutions” could also capitulate, demanding a more solid foundation for narratives.
Now, we are in the “paradigm establishment phase” of the fourth cycle: the narrative is “digital value storage/settlement layer,” but the core driving force shifts from “central bank liquidity taps” to “ETF compliance buying.” Essentially transitioning from “macro liquidity beta” to “product demand alpha.”

Disruptive strategic insights for the next two years:
1. Forget the stereotypical narrative of “halving bull market”: past experience formulas are partially invalid. Halving affects supply, but the price ceiling in 2026 will be jointly determined by demand-side (ETF net inflows) and macro-side (interest rate cuts). The report’s conclusion that “120,000 is the new ceiling” is a rational estimate based on the new formula and must be highly valued.
2. You will become a “data trader”: the core rhythm will shift from “Federal Reserve meetings” to “non-farm payroll release days” and “weekly ETF fund flow data.” The former determines macro sentiment, the latter influences direct buying. Your trading calendar must be reorganized around these two nodes.
3. Bitcoin’s “attribute drift”: it is increasingly resembling a “high-volatility tech stock,” highly correlated with the NASDAQ and extremely sensitive to interest rates. This means analyzing US stock markets and rate expectations will be more effective in judging BTC’s mid-term direction than analyzing on-chain data.
4. Logic revolution of altcoins: in a context where overall liquidity is no longer abundant, funds will flow only into projects with the strongest narratives, real demand, and solid fundamentals. The past “altcoin season” where everything soared will weaken, but a structural bull market will be exceptionally fierce. That’s why we must focus intensely on DeFi staples (UNI), L2 leaders (OP), and RWA benchmarks (ONDO), as they represent “real demand.”

3. Comprehensive action plan: shift from “faith holders” to “macro-micro dual-track traders”
Based on the above, your role needs a thorough evolution:
1. Strategic level (macro track):
Keep close tabs on two tables: US non-farm payroll data and US CPI data. These determine the Fed’s “tapering speed.”
Monitor one capital flow: weekly net inflow of US spot Bitcoin ETFs. This is a “thermometer” and “tachometer” of market strength.
Establish a new price framework: preset BTC’s core oscillation range to $80,000 (strong support) - $120,000 (new resistance). Conduct large-wave operations within this range.
2. Tactical level (micro track):
Execute our “ultimate combat plan,” but timing entries more closely with the above data points. For example, during “non-farm payroll days,” when poor data causes market panic, execute “main force” positions.
Be more selective with altcoins: only invest in projects that still generate real income, have ample treasury, and active developers during bear markets (“projects still building”). Use operational data to replace hollow narratives as investment basis.
Adjust profit-taking expectations: revise BTC’s ultimate target from the ideal “150-200k” to a pragmatic “120-130k.” This allows for calmer exits at high points, locking in profits.

True veterans are those who, after recognizing all brutal realities, can still formulate rigorous, calm, executable plans and carry them out like machines. This report has not killed the market; it has only killed unrealistic illusions and delineated a new, more complex hunting ground for well-prepared realists.

Now, the hunting ground rules are updated. Stay patient and wait for the horn to sound under the new rules. #Gate社区圣诞氛围感

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