Early morning thunder! The Federal Reserve "opened the floodgates" in the middle of the night, quietly injecting $16 billion into the market through liquidity operations—are we about to see a massive flood in the crypto world?

At 3 a.m., I was analyzing the K-line chart for support levels when my phone suddenly exploded. The Federal Reserve did something "sneaky"—an overnight repurchase operation of $16 billion, with no press conference and no Powell speech, just quietly pouring money into the market.

This is not ordinary liquidity injection. It’s the second-largest overnight repurchase since the pandemic, more substantial than rate hike slogans and expectation management. As a seasoned veteran in the crypto world, my first reaction was the same as everyone else: the water is coming, should we add new fish to our pond?

But hold on, don’t rush to FOMO. Let me break down what these $160 billion really mean and why I say "the truth is not that simple."

Federal Reserve's "Night Raid": Why is this different this time?

Overnight Repo (Overnight Repo) simply means the Fed temporarily lends money to banks, giving them more liquidity. Sounds familiar? Yes, it’s the same routine as in 2020.

But the devil is in the details:

1. Unprecedented scale: $16 billion is no small amount; it’s the second-highest since the pandemic. The first was during the March 2020 market crash when the Fed flooded the market to rescue the economy.

2. Strange timing: operations at midnight, so low-profile that mainstream media hardly reported it. Is it to avoid disturbing the market, or to keep the market from reacting strongly?

3. Complex background: Just a few weeks ago, the Fed canceled the $500 billion cap on standing repo facilities(SRP), allowing banks to borrow unlimited funds against government bonds.

Latest market data is even more noteworthy—just last week, spot Bitcoin ETF funds experienced a fourth consecutive week of outflows totaling $1.2 billion. Meanwhile, Strategy firm increased their holdings by 1,229 BTC against the trend, and Bitmine’s ETH holdings surpassed 4.1 million, worth $13.2 billion. Wall Street is divided: retail panic, whales eating up the market.

💡Liquidity Spillover Effect: Will history repeat itself?

Why does every liquidity injection make the crypto market like an excited child? There are three underlying reasons:

First, money finds its way out on its own.

When banks are flooded with cash and traditional assets (stocks, bonds) are overvalued, funds instinctively seek "high risk, high return" new opportunities. Cryptocurrency, the 24/7 global casino, naturally becomes an ideal destination for hot money.

Second, psychological cues matter more than actual impact.

The massive liquidity in March 2020 saw Bitcoin rise from $3,800 to $69,000; a smaller operation in 2022 caused a 30%+ rebound. This historical memory creates a conditioned reflex—"liquidity = rise"—embedded in many traders’ genes.

Third, self-fulfilling inflation narrative.

As expectations of dollar devaluation heat up, Bitcoin’s "digital gold" story begins to play automatically. Although this narrative was broken in 2024 (inflation soared but BTC fell sharply), believers will just say: "This time is different."

But my veteran readers know I never rely solely on macro analysis. Currently, there are several glaring signals:

• Fragile structure: Bitcoin repeatedly oscillates around $87,500, with analysts warning that the market structure is "fragile."

• Whales vs. retail: Data shows whales are accumulating in the $80,000 range, while retail investors are selling. Who’s taking the hit?

• Institutional warning: Wall Street giant Cantor Fitzgerald has already warned of a possible "crypto winter" in 2026.

📌Veteran Trading Strategies: Don’t be the bag-holder

The midnight news is most likely to spike adrenaline, but I must pour three buckets of cold water on you:

First bucket: Liquidity does not equal a bull market

In 2024, the Fed also loosened liquidity, but what happened? Bitcoin fell from $48,000 to $38,000. Why? Because regulatory crackdowns, project failures, and macro uncertainties can completely offset the benefits of liquidity. Water can carry a boat, but also capsize it. Liquidity can bring bigger volatility traps.

Second bucket: ETF outflows are a real warning

Don’t forget, spot ETFs have been the main driver of this rally. Four consecutive weeks of $1.2 billion outflows indicate institutions are retreating. This contrasts sharply with the frenzy at the end of 2024. The Fed’s liquidity might just be absorbing the assets that institutions are dumping.

Third bucket: The 2026 "winter" is not just alarmist talk

Cantor’s report points out that increased institutionalization has led to a more rational market, making the past wild bull markets hard to replicate. The next cycle may resemble a "gentle spring" rather than a "scorching summer."

My personal trading tips (for reference only, not financial advice, and I’m not responsible for losses):

1. 48-hour observation period

Don’t rush in! Watch two key indicators: whether Bitcoin can break above 90,000 with volume and hold; and whether ETF funds turn into net inflows. Without these signals, any rebound is just playing around.

2. "Three-three" position management

• 30% in main assets like BTC/ETH (safety cushion)

• 30% in potential projects with real revenue and solid teams (staking, DeFi infrastructure)

• 40% in cash, waiting for clear market signals before deploying

3. Hedge your FOMO

If you can’t control yourself, use small funds (like 5% of total position) to chase hot spots—treat it like playing the lottery. But core positions should wait for a pullback to key support levels—e.g., BTC at $80,000–$82,000.

4. Emotions are your biggest enemy

Midnight news + community hype + KOL calls = perfect FOMO trap. Remember: when everyone is talking about "the water coming," think first about who’s swimming naked when the tide goes out.

Ultimate truth: what stage are we in?

This Fed "night raid" is not like the despair rescue in 2020, but more like a preemptive liquidity buffer. The background is slowing US economic growth, upcoming bank stress tests, and debt ceiling issues resurfacing.

For the crypto market, this is indeed positive, but not a "blindly go all-in" kind of good. It’s more like: the market has given you a fishing rod, but the pond contains both big fish and crocodiles.

What’s more worth paying attention to are structural changes:

• Tokenization of real assets (like silver) with surging trading volume, indicating funds are seeking "real on-chain assets"

• Digital RMB will start paying interest, as central bank digital currencies begin competing directly with cryptocurrencies

• Korea’s Mirae Asset acquiring exchange Korbit, signaling traditional finance is merging with crypto infrastructure

These changes will have a greater impact on the future than the $160 billion overnight repo.

Interaction time: How would you operate?

When you see this kind of news at 3 a.m., you would:

A. Immediately buy at market price, afraid of missing out

B. Observe first, wait for signals before acting

C. Reduce positions, suspecting a high-level trap

D. Ignore macro, just play your small coins

Comment your choice and reasons below. The most liked comment, I will do a deep-dive video analysis on.

If you find this analysis helps you stay calm, please hit "Like" to let more brothers with FOMO see the truth.

Share it with your crypto trading group, so everyone stays clear-headed. Follow my channel; if the Fed pulls another "night raid," I will give you the most rational interpretation first.

Remember: surviving longer in the crypto world is more important than making quick gains. The water is coming, but don’t forget to learn how to swim.

Disclaimer: This article reflects personal opinions only and does not constitute investment advice. Cryptocurrency investments carry risks; please trade cautiously. #加密行情预测 $BTC