The Federal Reserve's recent actions are indeed somewhat contradictory—selling $6.8 billion in a single day on December 22, and a total liquidity injection of $38 billion over the past 10 days, yet the crypto and stock markets show little reaction. Even more surreal, as they end quantitative tightening to release liquidity, they simultaneously use reverse repurchase agreements to drain funds, with overnight reverse repos reaching $10.361 billion on December 18. This tug-of-war situation is almost as absurd as opening long and short positions simultaneously.

The real core issue still lies in U.S. debt. In the past three months, an additional $700 billion in government bonds has been issued, effectively draining liquidity from the market. Interbank borrowing rates have surged, and financing costs for small businesses have risen sharply. Ironically, all the money released by the Fed has flowed into financial assets—S&P 500 hitting new highs, gold's annual increase exceeding 60%—but the wages of ordinary retail investors have shrunk for three consecutive months. The stark contrast between asset inflation and stagnant income highlights how serious the problem is.

Looking at Bitcoin's current situation is even more worrying. Bitcoin is stuck around $86,000, oscillating with pressure both up and down. The Fear & Greed Index has fallen to 25, indicating extreme fear. On-chain data signals are worse—long-term holders are continuously selling, and $300 billion worth of dormant Bitcoin has re-entered the market this year. Spot ETFs have shifted from inflows to net outflows. All these point to one direction: market confidence is declining.

There is also a risk point that is easy to overlook. The Bank of Japan just raised interest rates to 0.75%, a 30-year high. Historical experience suggests that this level often triggers an average Bitcoin correction of about 15%. If this pattern repeats, there may still be room for bottom-fishing.

However, some signs of relief are worth noting. Currently, $270 billion in stablecoins are poised (including $16 billion in USDT), representing potential incremental funds. More importantly, the Fed's reverse repo scale has fallen to a historic low of $30.47 billion, indicating some easing of liquidity tightness.

From the current situation, the probability that the Christmas rally will continue with the usual big gains is not high. The internal contradictions in Fed policy have already disrupted traditional rules. To find real reversal signals, keep a close eye on the bank reserve ratio and reverse repo balance. Once these indicators show unusual movements, it could signal a market turning point.