#ETH走势分析 Two signals at the beginning of December may be changing the liquidity landscape of the crypto market.

The Fed has stopped shrinking its balance sheet, locking the size at $6.6 trillion; meanwhile, the probability of a 25 basis point rate cut at the December 11 FOMC meeting exceeds 85%. What does this mean?

**Review of the Three-Year Tightening Cycle**

Since the start of Quantitative Tightening (QT) in 2022, the Fed has withdrawn about $95 billion in liquidity from the market each month. During this period, Bitcoin has pulled back more than 35% from its high, and over $1.5 trillion in market cap has evaporated from the entire crypto market. Leverage liquidations, project blowups, and capital outflows—all are essentially chain reactions from tightening liquidity.

**Turning Point Signals Appear**

Recent data shows a single-day $13.5 billion injection through overnight repo operations, the second-largest single-day liquidity injection since 2020. More crucially, the balance sheet is no longer shrinking. The $60 billion in monthly maturing MBS (mortgage-backed securities) funds now flow directly back into the market, which effectively works as a form of stealth quantitative easing.

**Institutional-Level Changes**

The shift in attitude among traditional financial institutions is noteworthy:
- Vanguard, managing $11.6 trillion in assets, has lifted its crypto ban and opened trading for multiple mainstream crypto ETFs
- BlackRock increased its holdings by 1.2 million ETH in the past week
- J.P. Morgan launched a 1.5x leveraged Bitcoin structured product
- On-chain data shows whale addresses have self-custodied more than 47,000 new Bitcoins
- ETF fund flows turned from net outflows to net inflows of $176 million this week

These actions occurred within the policy pivot window, and they are not a coincidence.

**Potential Risk Alert**

Watch out for the Bank of Japan’s meeting on December 18-19. If the BOJ does raise rates by 25 basis points, it could trigger the unwinding of yen carry trades, causing short-term shocks to risk assets. However, historical experience shows that when the Fed eases while the BOJ tightens, the Fed's influence usually dominates—the same happened in 2019, and Bitcoin surged more than 250% in the following year.

**Current Phase Assessment**

From a liquidity cycle perspective, the market is transitioning from the late tightening phase to the early easing phase. The features of this stage: policy expectations shift faster than actual data, institutions position in advance, and retail sentiment remains cautious.

Historically, this window period often corresponds with asset prices bottoming out amid volatility. The November pullback may have been a leverage flush; if the December rate cut happens, the lower cost of capital will directly improve risk appetite.

As for allocation advice? Keep enough cash to handle volatility, while not missing out on the main opportunities from returning liquidity. The key is to understand where we are in the cycle, not to chase short-term swings.

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