Attention, the market may be brewing a turning point.

Latest data shows that the excess liquidity indicator has fallen to 15.7%—this number is not only below the long-term average of 20.6% but also approaching a historical extreme. Meanwhile, the Federal Reserve has initiated $40 billion monthly repurchase operations, starting to "replenish" the market. The combination of these two signals may indicate something.

First, what does this 15.7% mean? Excess liquidity simply refers to how much idle money is in the banking system; the lower the ratio, the tighter the funds. At this level, it is approaching the 11.1% level seen before the repo market crisis in September 2019. That year, due to liquidity drought, overnight repurchase rates skyrocketed, forcing the Fed to intervene urgently.

Looking back 15 years, patterns emerge:

After the 2008 financial crisis, this indicator climbed from 12.7% to over 20%, and the market rose from the ashes. During those years, the Fed's money-printing machine ran at full throttle, and its balance sheet expanded several times.

Between 2014 and 2018, as QE was phased out and balance sheet reduction began, liquidity gradually declined. When it fell below 12% in September 2019, the system nearly collapsed.

In 2020, with the outbreak of the pandemic, unlimited QE re-emerged. Liquidity soared to a historical peak of 32.3% in 2021, when the market had more money than it knew what to do with.

Then came the tightening cycle of 2022-2024. Aggressive rate hikes and quantitative tightening hit simultaneously, causing liquidity to plummet from 32% to 19%, nearly halving.

The current level of 15.7% is very delicate—below the average, with limited room for further decline, yet the Fed has started injecting funds regularly again. Historical experience tells us that when liquidity bottoms out and rebounds, risk assets often react in advance.

Of course, this does not mean a rapid surge is imminent. The transmission of monetary policy takes time, and market sentiment recovery is also a process. But at least, excessive pessimism may no longer be justified. If you have been watching from the sidelines, now may be a good time to reassess your positions. For mainstream assets like ETH, if the liquidity improvement is expected and technicals align well, there could indeed be some phased opportunities.

Just remember one thing: data analysis can provide direction, but markets are always unpredictable. Any operation should be based on your own risk tolerance.