2025-12-26 16:25:43

Starting in 2026, the true dilemma Bitcoin faces under liquidity tightness

A consensus is spreading in the market: there is basically no hope for the Federal Reserve to cut interest rates in January.

The latest data is shocking— the probability of the Federal Reserve maintaining the January interest rate unchanged has soared to 84.5%, and expectations of rate cuts are almost frozen. This is completely different from the optimistic outlook at the beginning of the year. Back then, everyone thought the rate cut wave would go smoothly, but now it turns out all Federal Reserve officials are "hawkish": Harker explicitly said "there's no need to move interest rates before spring," and New York Fed President Williams also emphasized "the current interest rate level is actually quite comfortable."

Inside Wall Street, the debate is even more heated. Goldman Sachs and Morgan Stanley are still betting on two rate cuts in 2026 (50 basis points), but HSBC and Standard Chartered are firm on zero rate cuts for the whole year, and Macquarie even bets on a rate hike before the end of the year. The divergence boils down to three issues: how sticky inflation is, whether employment data is reliable, and whether the neutral interest rate will be raised. In plain terms, the days of cheap money are not coming back in the short term.

This directly hits Bitcoin— the tighter the US dollar liquidity becomes, the more immediate the effect.

The market already suffered during Christmas. Bitcoin-related ETFs continued to bleed, with a net outflow of $175 million on December 24 alone, with large funds leading the charge. During the same period, there were multiple extreme flash crashes, with some trading pairs even dropping close to $24,000 (though quickly rebounding), showing typical order book breakdowns and liquidity shortages. The technical outlook is also deteriorating, and the entire market is filled with a sense of unease.

When the Federal Reserve "stands pat" and the market "lacks money," Bitcoin may need to wait much longer than expected.

BTC-1,4%

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OfflineNewbie

· 11h ago

Once again, we've been cut down. The Federal Reserve folks really don't play by the rules. With liquidity so tight, how is BTC supposed to play? Just wait and see. Where's the promised rate cut? Now it's all "hawkish" talk. My principal... Wall Street is already arguing, showing that no one really knows what's going on. As retail investors, we must prioritize survival. I didn't even react when the Christmas dip took us to 24,000. And now this "quick rebound"? That's just fooling ourselves. If short-term gains are impossible and money is cheap, I might as well just hold on as a pure rookie. ETF outflows hit 1.75 billion in a day—sounds terrifying. Who's actually buying the dip? The moment of flash crash really shattered my mindset. The order book was breached, and people still talk about liquidity? Can you really wait? As for me, I just can't wait anymore.

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ImpermanentPhobia

· 11h ago

Damn, no more interest rate cuts and no more liquidity—this is true despair.

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PancakeFlippa

· 11h ago

Trying to deceive us again with rate cuts? I knew it long ago. That bunch of old foxes at the Federal Reserve never intended to loosen monetary policy.

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