2026-01-04 19:24:28

Recently, the Federal Reserve released 105 billion in overnight liquidity, and the crypto community's reactions have been polarized. Some enthusiastically shout "bullish signal," while others are confused, asking "What does this have to do with my coin price?" As an analyst who has been closely monitoring the market for a long time, I want to clarify the logic behind this move.

Let's start with the basic concepts. Liquidity essentially refers to the amount of funds flowing within the financial system. When the Fed injects liquidity, it is like adding "vitality" to the entire financial system. When there is more money in the system, capital seeking returns will naturally not be satisfied with low-yield assets like bonds and fixed deposits, and will seek higher-yield investment channels—cryptocurrencies fall within this range of options.

But why is this particular injection worth paying special attention to? The key lies in the scale and timing. 105 billion is one of the largest overnight liquidity operations so far this year, and it occurred during a period of increased volatility in the US stock market and abnormal fluctuations in Treasury yields. This indicates that the financial system is already showing signs of stress. The Fed's move is not just routine; it is a substantial risk hedge. The strength of this signal is markedly different from previous instances.

Looking back at historical data over the past five years, a clear pattern emerges: whenever the Fed initiates large-scale short-term liquidity injections, the crypto market tends to experience a significant upward trend afterward. The most straightforward example is the COVID-19 pandemic shock in 2020. After the Fed launched unlimited quantitative easing, Bitcoin rose from below $4,000 to its subsequent all-time high. This is not a coincidence but an inevitable result of a liquidity-rich environment and capital allocation.

Of course, abundant liquidity does not mean automatic easy gains. Short-term market volatility still exists, and choosing which coins to hold and how to manage risks require personal judgment. But from a macro perspective, the environment is indeed moving in a direction that favors asset creation.

BTC1,96%

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SchrodingersPaper

· 17h ago

105 billion? Sounds like a lot, but did it really get invested? That's the real question... Alright, here we go again with the story of 2020. Back then, anyone could make money. And now? I just want to know when this money will arrive in my wallet. Don't just talk about macro stuff, bro. Bull market signals? I feel like I'm holding all bombs. Wait, this logic sounds nice, but I heard similar things last year. Look at my account now... Reminded me, in 2020 I was also tricked by this kind of rhetoric. I'm still stuck at the floor price haha. Liquidity abundance = coins will rise. I can explain this theory ten times, but every time it just rebounds and then it's over. So the key is, when do I get in? After your analysis, I still have to judge myself. It's a bit tiring. 105 billion sounds like a market rescue, but I feel like it can't save my short position... This story sounds so good. I kept listening and going long, but by the end of the night, I was down three points again.

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CountdownToBroke

· 17h ago

105 billion is poured in, let's see who can catch it, anyway my account is already half dead It's about liquidity and macroeconomics, basically betting on whether the Federal Reserve will continue to pump money If it can rise this wave, I will sell; if it falls, I will buy the dip. Anyway, I will lose either way I did buy the dip in 2020, but I'm still trapped now, so don't talk to me about historical patterns With such strict regulation, no matter how much liquidity there is, it still depends on policy decisions

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JustHereForAirdrops

· 17h ago

105 billion in liquidity? Man, the Fed is really panicking this time. It feels like a storm is coming. To put it simply, the system is experiencing blood loss; some money needs to be injected in. We just need to take a sip of the soup. The lessons from 2020 are still fresh. When there's more money, it naturally flows our way. The question is, are we brave enough to go all in now? Historical data looks good, but I'm worried this time they won't play by the usual rules. I just want to know when big players start building positions—that would be the real signal.

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SandwichVictim

· 17h ago

Is 105 billion in liquidity a lot? Honestly, it's just the Federal Reserve putting out fires... The real money still depends on what happens next.

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PonziDetector

· 17h ago

105 billion? Sounds like a lot, but I still have to ask, is this really the same as the wave in 2020? The market sentiment feels completely different. It's another talk about historical data, but the problem is that the logic for pricing risk assets has changed now. More liquidity does not necessarily mean coins will go up. Don't be too optimistic. The Federal Reserve printing money is inherently a double-edged sword. It might boost the market in the short term, but what about the long term? How do you calculate the inflation tax? Wait, you said the financial system is under pressure, but that money might not even flow into the crypto space. Let's save Wall Street first. This analysis seems reasonable but misses a key question—are institutions really waiting for liquidity to buy the dip in crypto, or are they still on the sidelines?

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ContractCollector