There’s a lot going on with the Fed. QT has been completely halted, and recently some officials suggested that the balance sheet expansion could happen soon. Some institutions speculate that as early as next week’s rate meeting, there might be an official announcement—to buy $20 billion of short-term Treasuries monthly and supplement reserves through RMP operations.

More importantly, did you notice the wave of operations in early December? The liquidity injected by the Fed was the most aggressive since the 2020 pandemic. Once something like this starts, just like a rate-cutting cycle, it doesn’t stop easily.

Now, looking at the market. From October 11 up to now, sentiment has been downright miserable—out of a month, 29 days have been marked with “fear” or “extreme fear.” Such a long stretch is rare even historically. Do many people think fear is a bad thing? Think about it from another angle: what’s really happening during these extended periods of fear?

Put simply, the main players are wearing down retail investors’ psychological defenses to the thinnest point—until you start doubting everything, until you’re too afraid to believe in a rebound even if it comes. Fear is never the end point; it’s a catalyst for the redistribution of chips. This correction has been even harsher than the two previous times Bitcoin dropped 30%—with deeper panic, longer shakeouts, and a more drawn-out sense of fear.

But you know how it goes: the harsher the shakeout, the stronger the rebound tends to be.