BTC Returns to $93K as Fed Injects $160B to Rescue Market?

Original Title: "BTC Returns to $93,000, Did the Fed Inject $16 Billion to Rescue the Market?"

Original Author: 1912212.eth, Foresight News

BTC has not experienced a four-month consecutive decline on a monthly chart since 2019. Today, this superstition seems to still be effective. Since the decline in October this year, BTC has been testing for 3 consecutive months, with the lowest falling to around $80,000.

Starting from January 1st, the Bitcoin daily chart has achieved 5 consecutive increases, and on January 5th, it even broke through $93,000. ETH has also forcefully broken through $3,200. Meme coins such as PEPE, BONK, PENGU, and BOME have recently taken turns topping the list of gainers.

Coinglass data shows that the total amount of liquidated futures contracts on the network reached $216 million in 24 hours, with short liquidations accounting for $168 million.

After more than 3 months of low readings, the Fear and Greed Index today rarely rose to 42, returning to neutral sentiment in the market.

Global risk asset markets saw a general rise today, with the Japanese and South Korean stock markets leading the gains. The South Korean KOSPI index rose more than 2.27% in early trading today, breaking through 4,400 points for the first time and hitting a new record high. The Nikkei 225 index surged more than 1,100 points in early trading, almost breaking through the historical high by 2%. In A-shares trading, the Shanghai Composite Index rose by 0.46%, approaching 4,000 points. The Hang Seng Index rose by 0.09% at the opening.

Regarding the U.S. stocks, S&P 500 futures rose by 0.46%, Nasdaq futures rose by 0.26%, and Dow futures rose by 0.58%. Precious metals rose sharply, with spot gold breaking through $4,420 per ounce, with a 24-hour increase of over 2%, and spot silver breaking through $76 per ounce, surging by 4.5%.

Is the altcoin's big rebound coming?

End of 2025: Fed Injects $16 Billion in Liquidity

Cryptocurrency assets, led by BTC, are closely linked to global market liquidity. When liquidity is low, prices are difficult to rise significantly, and when liquidity is abundant, prices can continue to rise.

On December 30, 2025, according to Barchart data, the Fed injected $16 billion through overnight repurchase agreements into the U.S. banking system, marking the second-largest liquidity injection since the COVID-19 pandemic.

This move is usually seen by the market as a signal of support from the Federal Reserve in addressing potential bank liquidity shortages or financial stress. Although the chart shows a recent surge in injections, the overall trend reflects a loosening monetary policy. In the cryptocurrency market, this liquidity injection often stimulates risk appetite recovery, as cheap funds easily flow into high-risk asset classes, boosting cryptocurrency prices. Investors may interpret this as the Federal Reserve's unwillingness to let the economy experience a hard landing, thus boosting market confidence and avoiding more severe recession risks.

On December 31, BitMEX co-founder Arthur Hayes stated that liquidity in the crypto market may have bottomed in November and is slowly recovering, suggesting it's time for cryptocurrencies to start rising.

Danske Bank's FX and Rates Strategist Jens Naervig Pedersen said in a report that global market liquidity is expected to remain subdued this week but could improve next week. The strategist noted, "Looking ahead, market liquidity should improve next week as more economic data is released." Key data next week includes important US labor market data, such as the December nonfarm payrolls report announced on January 9, and the ISM survey. Over the year-end period, many market participants are on holiday or closing positions, leading to generally lower market liquidity.

Significant Net Inflows into BTC and ETH Spot ETFs at the Beginning of the Year

Bitcoin spot ETF data saw net inflows of $355 million on December 30 after months of poor performance, and another net inflow of $471.14 million on January 2.

The magnitude of its sudden net inflow growth is relatively large compared to the momentum.

Regarding ETH spot ETFs, net inflows were $67.84 million on December 30 and reached $174.43 million on January 2, marking a new high in single-day net inflows since December last year.

The current ETF data performance of both assets still requires ongoing observation, but the net inflow performance at the start of the year has a significant positive impact on price support.

What's Next

JackYi, founder of Liquid Capital, tweeted on January 3, "Before the bull market of 2026, the early closure of short positions results in small losses, while late closure will lead to huge losses. Those who are still bearish in the market are either all talk or cannon fodder. After experiencing more than a month of turbulence, the bulls will surely be proud, pessimists are always right, and optimists always move forward."

On the same day, 10x Research also published an article hinting at a possible structural rebound opportunity in the market. "Below the surface of the cryptocurrency market, significant changes are taking place. As Bitcoin's dominance begins to decline, our model has detected a key turning point in history from a defensive stance to an opportunity. The focus of this cycle is not on individual tokens or narratives, but on the broad collaborative validation pattern emerging between mainstream coins and selected altcoins. Momentum effects, relative performance, and market participation are beginning to resonate, and traders cannot afford to ignore this.

10x Research states that the current environment is not a broad bullish market and should not be passively awaited. The next stage will test discipline, strategic rules, and active position management. Clear risk control will be key to differentiating profit-takers from market noise. While most investors wait for headlines to guide them, traders should focus on market structure and signal validation.

Analysts from the blockchain analytics platform Santiment pointed out that cryptocurrency market participants showed strong sentiment on social media early in the year, but also warned that whether the market can move further upwards depends on whether retail investors can remain rational. "We need retail investors to maintain a certain level of caution, a certain level of pessimism, and a certain level of impatience," said Santiment analyst Brian Quinlivan in a YouTube video posted on Saturday. Despite other crypto sentiment indicators showing market participants experiencing fear, Quinlivan stated that Santiment's social media data pointed in the opposite direction. "The current sentiment is very positive," he said, "which is usually a bit concerning, but this may just be a typical rebound after the holiday break." Quinlivan indicated that he was not overly concerned about a "surge of FOMO sentiment," but added that if Bitcoin were to quickly rise to $92,000, this sentiment could flood the market.

However, the data also shows some bearish sentiment in the market.

glassnode recently tweeted that the slowing inflow of funds coincided with long-term holders increasing their selling pressure. As BTC's price fluctuates within a narrow range, this situation is gradually becoming apparent. This reflects investors becoming increasingly exhausted over time, a common feature of a prolonged bear market phase.

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