What will the market do under the massive liquidity injection by the Federal Reserve?

Industry insiders point out that the Fed's easing measures are gradually intensifying. Once the market enters an upward cycle, a short squeeze is inevitably triggered—this is a typical characteristic in a liquidity-rich environment.

When central banks continuously inject funds into the market, investors' risk appetite tends to increase. Idle funds need to find an outlet, and crypto assets, as highly volatile assets, are easily targeted for profit chasing. The seemingly stable short-term trend can trigger a chain reaction once a breakout occurs, forcing short sellers to cover their positions and further accelerating the upward movement.

This logical chain is worth noting: ample liquidity → increased risk appetite → capital inflow → price breakout → accelerated short squeeze. In such an environment, market participants need to prepare in advance.