#Gate广场圣诞送温暖 Fed has paused its balance sheet reduction, let's clarify a few key points:

1. Essentially, it is not about starting a large-scale liquidity injection, but rather shifting from continuous liquidity withdrawal to no longer withdrawing. The liquidity is no longer worsening, which is crucial for risk assets (including BTC).

2. How to view it in this round of market?
BTC dropped from 120,000 to 80,000, which is more about squeezing high leverage + squeezing emotional bubbles, rather than a fundamental collapse.
With the expectation of halting the balance sheet reduction, this period resembles a deep washout before a liquidity turning point, rather than necessarily the end of a bull market.

3. Looking back at history:
The 2018 balance sheet reduction + interest rate hikes devastated the market,
After the Fed stopped tapering and shifted to easing in 2019, BTC rose from 3k to 13k.
Once liquidity direction shifts from tight to loose, BTC usually does not stay at the bottom range for long.

4. Judgment on the upcoming BTC:
Don't fantasize about a big bullish candle returning to 120,000 in the short term; it's more likely a decline is at the end + a frustrating sideways movement. There's a high probability of oscillating between 78k and 93k.
In the medium term, under the combination of stopping the balance sheet reduction and the possibility of future interest rate cuts, the space below the 80,000 line may not be larger than the space above.

5. My understanding is that this round of sharp decline may not necessarily be the end, but rather more likely the starting point for the next phase of the market. Panic is panic, but don't overlook the key point of the "liquidity inflection point."