The Federal Reserve's recent actions are indeed somewhat contradictory—on December 22nd, they injected $6.8 billion in a single day, and over the past 10 days, they have pumped a total of $38 billion. Yet, the cryptocurrency and stock markets haven't shown much reaction. Even more surreal is that while they are ending quantitative tightening to release liquidity, they are simultaneously withdrawing funds through reverse repos, with the overnight reverse repo hitting $10.361 billion on December 18th. This kind of tug-of-war situation is almost as absurd as opening both long and short positions at the same time.

The real core issue still lies in U.S. debt. Over the past three months, an additional $700 billion in government bonds have been issued, effectively draining liquidity from the market. Interbank borrowing rates have surged, and financing costs for small businesses have risen sharply. Ironically, all the money released by the Fed has gone into financial assets—S&P 500 hitting new highs, gold prices rising over 60% this year—while ordinary retail investors' wages have shrunk for three consecutive months. The stark contrast between asset inflation and stagnant income highlights how serious the problem really is.

Looking at Bitcoin's current situation is even more concerning. Bitcoin is stuck oscillating around $86,000, facing pressure both up and down. The Fear & Greed Index has fallen to 25, indicating extreme fear. On-chain data signals are worse—long-term holders are continuously selling, and the $300 billion of dormant Bitcoin has re-entered the market this year. Spot ETFs have shifted from inflows to net outflows. All these point to one direction: market confidence is declining.

There's also a risk point that is easily overlooked. The Bank of Japan just raised interest rates to 0.75%, a 30-year high. Historical experience suggests that this level often triggers an average Bitcoin correction of about 15%. If this pattern repeats, there may still be room to buy the dip.

However, some signs of relief are worth noting. Currently, there are $270 billion in stablecoins poised for deployment (including $16 billion in USDT), representing potential incremental capital. More importantly, the Fed's reverse repo scale has fallen to a historic low of $30.47 billion, indicating some easing of liquidity tightness.

From the current situation, the probability that the Christmas rally will continue with the usual big gains is not high. The internal contradictions within the Fed's policies have already disrupted traditional rules. If you want to find real reversal signals, keep a close eye on the bank reserve ratio and reverse repo balance. Any sudden changes in these two indicators could signal a market turning point.