For the past three years, markets have been living through a period of tight liquidity. The Fed was putting pressure on the economy, rates stayed high, capital flowed out of risk assets, and crypto operated under constant tension. But now — for the first time in a long while — the situation is genuinely starting to shift.
After the Fed’s December meeting, a schedule was published showing purchases of short-term U.S. Treasury securities totaling nearly $40B over 30 days. The first purchases have already taken place, and by the end of the month several more operations are expected totaling almost $30B. Officially, this isn’t being called “quantitative easing,” but in practice liquidity is returning to the systеm. For markets, this is a key moment: fresh money is fuel. And the more fuel there is, the faster markets with risk and upside potential tend to move.
Manipulation
Against this backdrop, equities look confident. The S&P 500 has nearly revisited its highs, and the U.S. dollar index has been trending lower since late November — investors are willing to take risk again. And that’s exactly why Bitcoin’s behavior looks so odd: it’s still acting as if it doesn’t care about these positive macro signals.
In my view, the reason is the same as always — manipulation by large players. We repeatedly see Bitcoin dumped sharply right as the U.S. session opens, with no obvious catalyst. Firms like Jane Street and other market makers create a downward impulse, trigger liquidations, and then quietly accumulate at those levels. That’s why it can feel like the bull market has “broken,” even though the macro backdrop suggests the opposite.
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The Fed Changed Its Regime — and That’s a Fundamental Shift
The most important takeaway from the latest Fed meeting isn’t even the 0.25% rate cut — it’s the tone. The regulator made it clear that policy is now in a neutral zone: they’re no longer trying to intentionally cool the economy. Rate hikes aren’t even on the table. Yes, Powell is being cautious and hints at a possible pause in January, but the U.S. labor market continues to weaken and unemployment is rising — which strongly limits how long the Fed can keep rates high. His cautious messaging looks more like an attempt to avoid overheating markets too early. In practice, liquidity has already started flowing back into the systеm.
It’s important to understand the mechanics. The Fed doesn’t “print money” directly and hand it to investors. It buys short-term Treasuries from primary dealers — the largest banks and financial institutions — and in return, new dollar reserves appear on their balance sheets.
Then the real process begins. That money doesn’t sit idle: banks route it into equities, lending, repo operations, and financing for hedge funds and market makers. Through this chain, liquidity gradually spreads across the financial systеm. It doesn’t reach Bitcoin directly — it comes through ETFs and funds. When funds buy spot Bitcoin ETFs, providers are required to buy real BTC on the market. That’s where genuine demand shows up, not just derivatives trading.
By my estimates, around 60–65% of this flow will support equities first, but 10–15% can realistically make its way into Bitcoin. And it won’t happen overnight — the process unfolds over weeks and months.
Risks from Japan
An additional source of uncertainty is the Bank of Japan meeting. A rate hike of even 0.1–0.25% could temporarily pressure markets. We’ve seen a similar setup before: a stronger yen, carry trade unwinds, a pullback in stocks, and a sharp drop in Bitcoin. If it repeats, a short-term dip of 5–7% is absolutely possible.
But the key difference now is that Japan’s tightening wouldn’t be happening in a vacuum. The Fed has already moved into a neutral phase and is injecting liquidity, creating a buffer for risk assets. So even if a correction happens, it will likely be limited both in depth and in duration.
What’s Happening with Bitcoin Right Now
Technically, the market still looks tense. Bitcoin is stuck below resistance around $94,000, liquidity is thin, and moves are sharp. At the same time, the broader structure remains bullish: higher lows are forming, and the odds of a deep correction are decreasing. This looks like a classic late-stage correction: weak hands exit, new large players take losses, while long-term holders stay calm. That clears the market and reduces future selling pressure.
It’s also worth looking at the liquidation map. Right now the market is skewed toward longs. Large clusters of stops sit below around $88–89K and above in the $93–94K zone. A scenario with a brief sweep lower to collect liquidity, followed by a move higher, looks logical — and it has played out multiple times over the last few weeks.
Bottom line: despite the noise, manipulation, and local volatility, the overall Bitcoin trend hasn’t broken. The Fed is bringing liquidity back for the first time in three years, rate hikes are essentially off the table, and sharp downside moves right now are not the start of a bear market — they’re phases of redistribution and accumulation.