#战略性加仓BTC Will the cryptocurrency market follow the Fed's move of injecting $16 billion in liquidity?

On December 30th, the overnight repurchase operation injected $16 billion, marking the second such aggressive liquidity injection since the pandemic began.

To put it simply, although officially called "Reserve Management Purchases" and not quantitative easing, it essentially means the Fed is expanding its balance sheet. For the highly volatile crypto market, there will indeed be short-term transmission effects—lower funding costs, and some funds may flow into the crypto space through institutional channels. However, be cautious of one issue: can the money really flow in? Transmission efficiency is often less than ideal.

Looking at the current data, we can see. Bitcoin is hovering around $87,000, with a 24-hour trading volume surging by 61.96%, up 1.54%. But the most critical point is that Bitcoin’s dominance has reached 59.35%—this indicates the market is still following BTC’s rhythm, with a clear leader effect.

Institutions are also taking action, having net accumulated 42,000 BTC to hedge outflows from ETPs. Coupled with this liquidity boost, Bitcoin is likely to continue oscillating upward.

Ethereum’s performance isn’t as strong. While it will follow the trend, its gains will be weaker. Capital inflows into DeFi will be delayed, and the perpetual contract basis is currently very subdued, making leveraged positions cautious.

What about those smaller coins? It’s unlikely they all rise together. The previous liquidity injection of 6.8 billion caused a $250 million liquidation in 24 hours. Deleveraging is still ongoing, and most altcoins are just oscillating within a range, even weakening due to capital siphoning.

How to respond? It’s best to adopt a layered approach:

For spot trading, a light position in Bitcoin—50%-60% of your portfolio—is enough, with a stop-loss set at the $85,000 support level.

For futures, avoid high leverage and use the current 45% volatility range for swing trading.

Looking ahead, keep an eye on the overnight reverse repo balance (currently still $268.7 billion) and the SOFR-IOBR spread. If liquidity continues to loosen, consider increasing positions in mainstream coins like Ethereum; if the spread widens, quickly reduce risk exposure.

Honestly, this $16 billion scale is just a fraction of the QE in 2020, and the money mainly circulates within the banking system. It’s quite difficult for the crypto market to see a trend-driven rally. Short-term speculation requires good risk control—don’t be too greedy.