The latest Fed dot plot has revealed their stance: only two rate cuts are planned for 2026, one in 2027, and rate normalization is delayed until 2028. This means that the market's expectation of a significant liquidity infusion is unlikely in the short term.

Many interpret the $40 billion Treasury bond purchases as QE, but there’s a fundamental misunderstanding. In reality, this is an RMP (Overnight Reverse Repurchase) operation. The two are fundamentally different: QE involves continuous liquidity injection into the market, while RMP repurchase operations are emergency measures banks use at year-end when facing liquidity shortfalls. RMPs need to be repaid afterward and are a technical stabilizing measure rather than systemic easing.

The key indicators that truly determine the outlook for cryptocurrency market liquidity should include: whether the SLR (Supplementary Leverage Ratio) is further relaxed, whether banks’ balance sheet expansion ability has recovered, the strength of fiscal subsidy policies, and the direction of ON RRP (Overnight Reverse Repurchase Program) rule adjustments.

The next two critical data points will directly influence market direction. First is the December Non-Farm Payrolls report—due to the government shutdown in November, the data may not be ideal, and if it falls below expectations, it could trigger market volatility. Second is the January CPI data—if inflation remains uncontained after rate cuts, the Fed is likely to continue its tightening stance.

Overall, the market should not have overly high expectations for substantial easing in 2026. Under current conditions, reality is often more severe than pessimistic forecasts.