$SOL The bank stocks have collapsed, but there may be opportunities hidden in December.

The recent performance of American bank stocks is a bit frightening. The KBW Bank Index has plummeted 4.5% in five days, and the S&P 500 bank sector has also dropped by 2.9%. This is not just a simple pullback—on the technical charts, it is already approaching key support levels, and it could break through at any moment.

What's worse is that the signal behind this wave of decline suggests that the market is starting to believe the Federal Reserve will keep interest rates high for a longer period. Traders are frantically withdrawing their previous bets on interest rate cuts. The credit environment is tightening, which is not a good sign for the overall economy.

**Warning signals are flashing**

Miller Tabak's chief strategist Matt Maley said it plainly: if bank stocks continue to fall in the next two weeks, it will sound the alarm for the market. Why? Because banks are like the blood vessels of the economy; when they have problems, it often means credit is contracting and the economy is slowing down.

Regional banks are still holding a pile of commercial real estate loans, and the corporate default rate is also rising. When these time bombs will explode is uncertain. The resilience of the financial system is being put to the test.

**The Fed's "stealth operations"**

However, speaking of which, the Federal Reserve has not been idle. They are injecting money into the market through methods such as expanding the balance sheet and targeted liquidity injections. Although the officials won't call this "printing money," it essentially increases liquidity.

If you flip through the historical records, you will find that every time the Federal Reserve does this, the market often stabilizes in the short term, or even experiences a technical rebound. Especially at this time of year, combined with the repair demand after a significant drop, it may create some trading opportunities.

**December: It looks bad, but maybe it's the right time to enter**

The market is now a contradiction. On one side, the weakness of bank stocks is reminding you that there are fundamental issues, while on the other side, the liquidity from the Federal Reserve is providing a boost to the market.

This kind of tearing instead creates the uniqueness of December — when pessimistic sentiment collides with policy support, it often leads to "opportunities arising from the decline." After all, the best market conditions sometimes quietly start amidst widespread panic. For the cryptocurrency market, changes in liquidity in traditional finance are also worth paying close attention to.