Did you notice that on December 1, the Federal Reserve quietly hit the pause button on quantitative tightening? This signal might be more important than it appears on the surface.

Right now, the market is speculating about the next step—whether the so-called "reserve management purchase" program will be launched soon. According to Wall Street, the Fed might buy about $20 billion in short-term Treasuries each month, injecting liquidity into the system. Although this isn’t the same as the massive quantitative easing of the past, the marginal impact on risk assets like Bitcoin and Ethereum shouldn’t be underestimated.

Looking at recent market sentiment, the fear index is almost hitting rock bottom. Simply put, this is often a time when positions are being reshuffled. When retail investors are selling off in panic, there’s always someone on the other side picking up the chips—history has shown this time and again. The more sentiment is suppressed, the stronger the rebound might be later; that’s an old rule.

Ultimately, we’re at a critical juncture: on one side, policy expectations are shifting, while on the other, market sentiment is frozen. Understanding policy direction can help you grasp the underlying logic of this game; but being able to detect how positions are shifting beneath the surface is the core skill for navigating volatility.

The story of liquidity isn’t over yet, but smart money is already on the move.