There is an interesting phenomenon on December 30th worth paying attention to— the Federal Reserve just injected $16 billion in liquidity. This reminds people of a pattern: during each major liquidity injection cycle, the market trend tends to change accordingly.

Will history repeat itself? Looking back at March of the pandemic year, the Fed's large-scale liquidity infusion triggered a subsequent bull market. The current situation is somewhat similar—another round of liquidity expansion has begun, and there are signs that the intensity will gradually increase.

But this time, there is a key variable that is different: institutions have already significantly locked in their positions in Bitcoin and Ethereum. This means the market's supply and demand structure is quietly changing. Once the upward momentum is established, the scarcity of spot holdings will put enormous pressure on short sellers—this is the so-called short squeeze.

From a capital perspective, those who have positioned early hold ample ammunition. Increasing positions at low levels and paying off leverage, they are preparing for a rise. Meanwhile, the days are not easy for the shorts: early liquidation results in small losses, but if they hold on until the end... the cost becomes substantial. Under this situation, signs of loosening in the short sellers' joint defense line have already appeared.