The Fed has just officially announced: starting from December 1, the balance sheet reduction operation will be officially suspended. This asset-liability sheet contraction, which started in June 2022 and lasted for two and a half years, has finally come to a halt. The data is here: the Fed once compressed its balance sheet from nearly $9 trillion to the current approximately $6.6 trillion. Now suddenly calling a halt, the timing is intriguing. Two key signals cannot be hidden: Firstly, the economic indicators in the United States are indeed weakening. With insufficient growth momentum and weak employment data, continuing to tighten liquidity amounts to delivering a fatal blow to the fragile economy. The Fed is clearly avoiding the risk of a hard landing. Secondly, the reserve levels in the banking system are declining, and the money market has already started to issue liquidity warnings. If it continues to decline, systemic issues may truly arise. But this matter is not as simple as it seems on the surface. During the pandemic, the Fed substantially purchased bonds, which effectively provided a lifeline to the Treasury, accounting for half of the fiscal deficit. Continuing to reduce the balance sheet now? This means the U.S. government will face higher costs and greater difficulty in borrowing. Inflation still hovers around 2.8%-3.0%, and economic data is weakening, putting the Fed on a tightrope between "stabilizing growth" and "controlling inflation." For the crypto market, this serves as a short-term buffer - global liquidity tensions have temporarily eased, preventing assets from continuing to be under pressure. However, don't be too optimistic. In recent years, the Fed's assets have actually increased by over $2 trillion. Once hot money flows back in, the volatility in the stock market, commodities, and cryptocurrency markets will only become greater. Additionally, the U.S. economic data for October has been delayed until December due to the government shutdown, creating a data vacuum combined with a policy shift, making it easier for market expectations to get out of control. Recently, the performance of the US stock market and ETH has been quite surreal, and the underlying logic lies here. In short: The Fed's halt to tapering is not a sign of strengthening; instead, it exposes the dual pressures of the economy and liquidity. The interest rate cut cycle in 2025-2026 may come sooner and more aggressively than the market expects, so you might need to rethink your position allocation.

$ETH at $28.57 The market is holding its breath… one wrong move could trigger chaos. Are the bulls strong enough, or is a storm coming?