At 10 PM Beijing time tonight, another round of liquidity operations is coming. The Fed plans to inject $6.8 billion into the market through repurchase agreements, continuing the total injection of $38 billion over the past ten days. In simple terms, as the year-end approaches, banks are scrambling for cash, and the Fed has to step in to stabilize the situation.

Here, I want to clarify a cognitive misconception. Many people see "injecting liquidity" and automatically associate it with a new round of quantitative easing, but that's not the case. The repurchase protocol is a routine operation of the Fed—using government bonds as collateral to lend money to banks in the short term to help them get through year-end settlements and regulatory assessments. It's more like giving the system a painkiller rather than starting a new cycle.

But don't underestimate the impact of this operation on the crypto space. First, short-term interest rates will be suppressed. Historically, once the SOFR rate goes down, high-risk assets immediately follow suit. Bitcoin is particularly sensitive to the liquidity environment, and this operation may provide it with a breathing opportunity to test the resistance level of $88,000 to $90,000.

The deeper issue actually lies in the funding structure. Don’t think that a lack of liquidity is the crux of the problem; the core pain point is actually the gap in funding. The demand for coin purchases from companies like MicroStrategy has already reached saturation; the weekly inflow of Bitcoin spot ETFs has dropped directly from a peak of $2 billion to the $500 million level, showing a clear lack of momentum from trend-following traders; the leveraged positions in the futures market have not been completely cleared, and the total open interest across the network is still at a high level. These are all hidden risks.

Next, we need to keep a close eye on two key signals. The first is whether Bitcoin and U.S. stocks can rebound in sync—if the Nasdaq follows suit, the correlation effect in the crypto space will be very obvious; the second is the movement of the stablecoin ecosystem, as changes in the market cap of USDT often reflect the true intentions of capital. These two indicators can give you a more accurate idea of what the market is really thinking.