In the past couple of days, Bitcoin has experienced a rebound, which inevitably raises the question: what exactly is happening? Has the bear market ended? Will it break new highs again?

But don't worry! I believe that for an asset to truly start a sustained Bull Market, whether it's Bitcoin or stocks, there is only one core factor (liquidity).

Now Bitcoin has rebounded from 80K to 90K, many people will wonder: has the bear market ended? Is it possible to chase a wave of momentum and directly see 100K or even higher?

One of the main reasons for this rise in Bitcoin is the significant shift in market expectations regarding interest rate cuts, changing from a belief that there would be no cuts to now considering the possibility of cuts to be very high.

However, the fluctuations of Bitcoin mainly depend on liquidity. And now the market is buying the news: we are going to cut interest rates, the QT will end on December 1st, and liquidity will return.

So many people started to think: maybe this time it's not that bad, maybe just like last time when QT ended, buying the dip could lead to a profit. To be honest, those who buy in with this mindset are very likely walking into a trap.

How is this narrative constructed?
Looking back, when the market only gave a 25% probability of a rate cut in December, almost everyone thought it wouldn't happen. At that time, I predicted: there will be a cut, and the Federal Reserve will turn dovish.

The reason is simple: they want to stabilize market sentiment as much as possible before the quiet period.

The result is that Federal Reserve officials have begun to publicly say: the job market is deteriorating, and interest rate cuts have become necessary. As a result, the market has started to believe that the Federal Reserve has turned dovish, QT is about to end, and liquidity is returning. Bitcoin will naturally rise.

But the problem is: the market reacts to expectations, not reality.

In terms of structure, by the end of October, the U.S. repurchase market began to show significant signs of liquidity tightening. The SOFR (Secured Overnight Financing Rate) soared to 4.22% on October 31, not only breaking through the Federal Reserve's 4% ceiling, but also far exceeding the 3.9% that banks can earn on reserve deposits.

This indicates that institutions are fiercely competing for cash rather than borrowing money easily. At the same time, banks have begun to make extensive use of the Federal Reserve's Standing Repo Facility, with daily usage exceeding $50 billion, the highest record since the facility was established in 2021, and the largest overnight rescue scale since the liquidity crisis of 2020. It is important to note that the SRF is an emergency tap, not a daily tool. Institutions typically avoid using it, as it signifies a lack of funds and carries a clear stigma. However, when it is used extensively, it shows that liquidity pressure has become so severe that even maintaining appearances is no longer a concern.

And this occurs against the following background: the reverse repurchase fund pool is almost depleted, bank reserves continue to decline, the Ministry of Finance is issuing a large amount of bonds to withdraw liquidity, repurchase rates are fluctuating more intensely, so this is not a signal of liquidity easing, but rather a signal that liquidity is beginning to tighten.

The delinquency rate of loans related to office buildings in the United States has exceeded 11%-12%, higher than the peak during the 2008 financial crisis. Some high-risk areas are even approaching high double-digit levels. This means that more and more commercial real estate is devaluing and losing financing ability. At the same time, the private credit system is taking on an increasing amount of risk assets.

So what we are facing now is:
1. Liquidity Tightening
2. Decline in collateral quality
3. Leverage remains high.
4. Rising cost of capital

This is a typical double whammy, a paradigm shift that the market has not yet realized, and the market is still viewing issues with the mindset of 2020-2021: interest rate cuts = flood of liquidity.

But this time is different; stopping QT and lowering interest rates will not automatically create an environment of liquidity flooding, it merely slows down the tightening. When liquidity and collateral are both under pressure, the system's reaction is not rapid expansion, but a gradual exposure of risks. Coupled with Japan's potential interest rate hikes and the reverse unwinding of yen carry trades, once funds flow back to Japan, it could very likely trigger a renewed deleveraging of global risk assets.

I think the current rebound of Bitcoin is dangerous? Bitcoin is rebounding, but the basis of its rebound is hope, not structural repair.

Hope the Federal Reserve will save the market again.
Hope the liquidity can return immediately.
I hope this round is the same as the past.

But hopefully it is not a financial structure. Logically, if the market finds that liquidity has not materially improved after the end of December, the likelihood of Bitcoin falling below 60K again is not low. This sounds contrary to the mainstream view, as most people see a rebound in Bitcoin and believe the trend has turned upward again.

Rising prices + tight pipelines = fragile uptrend! Prices can rise, but liquidity is deteriorating, and ultimately liquidity will prevail.

Cautiously buy the dip! #BTC价格预测挑战