2025-12-25 05:30:30

The Federal Reserve's tug-of-war has turned the Bitcoin market into a mess

Recently, the Fed's actions have been outrageous—on December 22nd, they injected $6.8 billion in a single day, and over the past 10 days, a total of $38 billion has been pumped into the market. Yet, both the crypto and stock markets remain unmoved. A senior trader on Wall Street privately complained that this is more absurd than holding long and short positions simultaneously: on one hand, ending quantitative tightening and releasing liquidity, on the other hand, using reverse repurchase agreements to drain funds. On December 18th, the overnight reverse repo scale even soared to $10.361 billion. The money went in, but the market didn't react—it's truly money spent in vain.

The core issue lies in the US debt black hole. Over the past three months, $700 billion in new Treasury bonds have been issued, literally draining liquidity from the market. Interbank borrowing rates have surged, and small business financing has become significantly more difficult. Ironically, all the liquidity released by the Fed has flowed into financial assets— the S&P 500 hit new highs, and gold has gained over 60% this year—while ordinary retail investors' wages have shrunk for three consecutive months.

Looking at $BTC's situation, Bitcoin is stuck around $86,000 and oscillates repeatedly, with technicals at an impasse. The Fear & Greed Index has fallen to 25, indicating extreme fear. On-chain data shows an even worse picture: long-term holders are continuously selling, and $300 billion worth of dormant Bitcoin has re-entered the market this year. Spot ETFs are also experiencing net capital outflows.

There's also an invisible bomb— the Bank of Japan's interest rate hike to a 30-year high of 0.75%. Historical experience suggests that this point usually triggers an average 15% correction in Bitcoin.

However, there is some hope. The market has $270 billion in stablecoins (USDT accounts for $16 billion) poised for deployment—potential additional ammunition. The Fed's reverse repo scale has fallen to a historic low of $3.047 billion, indicating signs of easing liquidity tightness. From the current situation, the probability of a big Christmas rally continuing the usual year-end surge is low, as internal contradictions in the Fed's policies have rendered traditional rules ineffective.

If you're looking for a bottom-fishing opportunity, keep a close eye on two data points: the bank reserve ratio and reverse repo balances. Any sudden change in these indicators could signal a market turning point.

BTC-0.13%

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WalletInspector

· 10h ago

It's the Federal Reserve's magic trick again—watering with the left hand and draining with the right hand. We retail investors are caught in the middle and get cut.

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SellTheBounce

· 16h ago

Spending 38 billion without any reaction is just outrageous. Instead of waiting for the Christmas rally, it's more reliable to continue shorting. There will always be lower points.

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DegenApeSurfer

· 16h ago

The Fed's move is really outrageous. They injected 38 billion dollars, and the market didn't react at all. Are they just playing around here? Long-term holders are already fleeing. Still want to buy the dip? Dream on. 86,000 is really a deadlock position. It will either plummet or wait for the next news. There are so many stablecoins, but no one dares to take the risk. Everyone is scared. With the Bank of Japan raising interest rates, it's definitely going to break 80,000. The historical pattern is right there. What does such a low reverse repurchase rate indicate? It shows that even the Federal Reserve doesn't have confidence anymore.

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GweiTooHigh

· 16h ago

The Fed's move this time is really incredible. They released 38 billion dollars, and there was no reaction at all. It's outrageous. Retail investors' wages have shrunk for three months, and all the funds have gone into financial assets. No wonder BTC is struggling at 86,000. With 270 billion USDT in hand, just waiting for that signal to appear.

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AltcoinHunter

· 16h ago

Spending money to buy loneliness, this is the daily routine of the Federal Reserve, but Bitcoin didn't dare to take over... Long-term holders are all selling off, and I'm still holding here, feeling a bit anxious. There are 270 billion stablecoins pressing down, just waiting to see when the deadlock will be broken. The key still depends on these two data points. The 86,000 fluctuations—are we building a bottom or breaking down? How does it feel like all the rules have failed? That 0.75% rate cut in Japan, most likely another 15% drop, whether to cut or not is really a question.

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0xDreamChaser

· 16h ago

The Federal Reserve's tug-of-war is really incredible. They released 38 billion dollars but still can't push the market up. This tactic is more outrageous than me opening multiple long and short positions at the same time... No wonder Bitcoin is constantly stuck around 86k, feeling hopeless every day. Long-term holders are selling off, while stablecoins are accumulating... This is probably paving the way for bagholders. Wait, will the Bank of Japan press the big red button to trigger a sharp drop in Bitcoin? Historical experience suggests an average 15% correction... The key is to keep an eye on the reserve requirement ratio and reverse repurchase agreements. When these move, the market should wake up. Spending 38 billion just for nothing, the Federal Reserve really isn't doing well this time haha.

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GlueGuy

· 16h ago

The Federal Reserve's recent move is truly impressive. Injecting 38 billion dollars, yet the market remains completely unmoved. Spending money to buy loneliness is indeed outrageous. Long-term holders selling, I knew something was going to happen. The 300 billion dollar inflow of Bitcoin into the market is not a good sign. There are still 270 billion dollars in stablecoins untouched, feeling like they are waiting for an opportunity... I wonder if they might reverse and dump the market then. The Bank of Japan raising interest rates by 0.75% is really dangerous. Historically, corrections start at around 15%. I don't know if this time they can avoid it. The panic index is already at 25, indicating extreme fear. But it also feels a bit like a bottom-fishing signal? Just not daring to really go all-in.

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RatioHunter

· 17h ago

The Fed's move this time is really incredible. Injecting 38 billion without any reaction—this isn't saving the market, it's self-performance. Long-term holders are all selling out. The 300 billion dormant BTC is flowing out, and the panic index has dropped to 25—it's really time to panic. The 270 billion stablecoins are building up. If one day the policy shifts, the market could explode. The key is to keep a close eye on reverse repurchase agreements. Bitcoin at 86,000 still has another 15% to fall, right? The Bank of Japan's move is really ruthless. The rope is too tight; it will break sooner or later—just a matter of when.

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