The Fed has really hit the brakes this time! Starting from December 1st, the three-year balance sheet reduction policy has officially come to a halt. This news is no small matter for the crypto world; the global liquidity barometer has changed, and the market landscape will have to be reshuffled accordingly.

**Why stop suddenly now?**

In plain terms, the Fed can't hold on any longer. Look at these pressure points: the economic data is getting worse, the job market is weak, and bank reserves have already fallen to the warning line of $2.8 trillion. The cost of funds in the money market is soaring, and if it continues to shrink, it could really cause problems. What's even worse is that U.S. national debt has piled up to $38 trillion; if the Fed continues to sell off government bonds, the government's financing costs will skyrocket.

Amidst internal and external difficulties, this pause button must be pressed.

**How will the market move? Short-term is favorable, but long-term still needs observation**

The most direct effect of stopping the tapering is the improvement of liquidity. Every month, the market can retain an additional 25 to 60 billion in base currency, and this money has to find a place to go. Risk assets have always been the beneficiaries of such a loose environment—looking back at 2019, in the six months after the Fed stopped tapering, Bitcoin rose directly by 62.5%.

But don't celebrate too early. There is still a debate within the Fed about whether to continue lowering interest rates in December, and the government shutdown in the United States has led to a gap in economic data, making it impossible for the market to assess the real situation. This kind of information vacuum is most likely to amplify volatility, and it could turn into a roller coaster market.

**Where are the opportunities in the crypto world? Where are the risks?**

Opportunities definitely exist. The liquidity turning point generally drives high-risk assets to move first, with mainstream coins like BTC and ETH likely to lead the rise. Sectors that have done well in terms of compliance, such as RWA and AI integrated with blockchain projects, may also benefit from the overflow of funds.

But the traps are also obvious: policy transmission takes time, and the market is likely to speculate on expectations in advance, consuming the benefits. When the real news lands, it is easier to see a collapse of "buy the expectation, sell the fact." With leverage so high now, once it reverses, a double kill of long and short positions can make you question your life.

**Stay calm about this operation**

The Fed's shift towards the medium to long term is definitely a positive, but in the short term, we need to guard against pullbacks caused by expectation gaps. It is recommended to pay close attention to whether BTC can hold the $100,000 mark. If it breaks through with volume and maintains that level, then the trend opportunity will be quite clear. On the contrary, it may still need to consolidate for a while.

What do you think? Is this policy shift a signal for the bull market to start, or a catalyst for bubble expansion?