Federal Reserve Meeting Minutes Released: Crypto Market Faces Year-End Liquidity Test

Market Status: Bitcoin Fluctuates at Critical Levels

As of January 4, 2026, Beijing time, the focus of the crypto market remains on the latest signals from the Federal Reserve. According to real-time data, Bitcoin (BTC) is currently fluctuating around $91.17K, with a 24-hour increase of +1.09%; Ethereum (ETH) is at the $3.13K level. However, market sentiment indicators tell a different story—the Fear & Greed Index remains in extreme fear territory, and 24-hour trading volume has significantly contracted.

Veterans who have been deeply involved in the crypto space know that every policy shift by the Federal Reserve often serves as a market compass. This time, the release of the meeting minutes has further stirred the nerves of investors worldwide.

Federal Reserve Policy Analysis: Hawkish Under Currents Behind Rate Cuts

On December 11, the Federal Reserve announced a 25 basis point rate cut as scheduled, bringing the federal funds rate to a range of 3.50%-3.75%. On the surface, this appears to be a positive signal, but the core revealed by the minutes is much more complex.

Most notably, there was a significant disagreement within the voting committee—this is the most serious policy dissent in the past six years. Out of 12 voting members, 3 voted against the decision: 2 preferred to keep rates unchanged, and 1 even called for an additional 50 basis point cut. Such internal divisions often indicate policy uncertainty.

More critically, the outlook for the 2026 interest rate path is cautious. According to the implied information from the dot plot, the Fed’s expectation for rate cuts next year is quite conservative, suggesting only one rate cut throughout the year. This implies that the improvement in market liquidity conditions will be slower than expected.

Meanwhile, the Fed’s “Reserve Management Purchase” plan should not be overlooked—over the next 30 days, it plans to buy $4 billion worth of short-term government bonds. This operation, dubbed “non-QE easing” by industry insiders, is essentially a covert way of injecting liquidity into the financial system, leaving room for potentially larger interventions in the future.

On-Chain Signals: Extreme Fear Often Breeds Opportunities

Macroeconomic policy uncertainty is fully reflected in on-chain data. Over the past 30 days, short-term holders have accumulated losses exceeding $4.5 billion, ranking only behind the bottom during the 2024 yen arbitrage collapse.

Another important signal is that Bitcoin’s exchange balances have hit a new low since 2018, currently falling below 2.6 million coins. This indicates that investors are systematically withdrawing coins from exchanges and shifting toward long-term storage. Historically, such behavior often signals accumulation at market bottoms.

However, the contraction of trading volume during the Christmas holidays in Europe and America cannot be ignored, as it may amplify market volatility. Additionally, potential rate hikes by the Bank of Japan could impact the yen arbitrage trades and, consequently, influence global risk assets.

Phase-Based Trading Strategies: Adapting to Different Market Scenarios

In the current environment, different investor groups should adopt tailored strategies:

Short-term traders should focus on the support range of $86,500-$89,500 for Bitcoin and the $2,860-$3,060 volatility band for Ethereum. Under the premise of deleveraging, employing a buy-high-sell-low approach can help avoid risks associated with extreme volatility.

Long-term holders can refer to on-chain indicator signals. Currently, multiple long-term holding metrics such as the MVRV Z-Score are in the “green buy zone” at historical lows, often indicating a window of opportunity for long-term value investing. Since major institutional investors are aggressively accumulating chips, individual investors should also consider phased entry strategies.

Dollar-cost averaging enthusiasts might consider dividing their funds into 3-4 batches and gradually entering over the next week. Historically, Asian capital tends to accelerate into crypto assets around the Lunar New Year, creating a “Spring Festival effect” that often yields substantial returns.

The Ultimate Variable in 2026: Political Cycles and Policy Updates

It’s important not to overlook the transfer of power at the Federal Reserve. Chair Powell’s term ends in May 2026, and the Trump administration has already begun scouting potential successors. “Two Kevins”—Kevin Hassett, Director of the National Economic Council, and former Fed Governor Kevin Warsh—are widely considered top candidates.

Leadership changes at the Fed often imply subtle shifts in policy philosophy, which will directly impact the scale and pace of liquidity injections in 2026. From this perspective, the opportunities in the crypto market over the next 12 months could far exceed current market expectations.

Key Takeaway: Avoid Single Events Dictating Investment Decisions

Historical experience shows that the long-term trend of the crypto market is never determined by a single Fed meeting but is driven by overall liquidity conditions and institutionalization processes.

Data indicates that 83% of institutional investors plan to expand their crypto holdings by 2025. This figure clearly demonstrates that, despite frequent short-term volatility, the long-term trend of the crypto market is being shaped by mainstream financial institutions’ strategic布局. The real investment opportunities are often hidden in the market’s anxiety and overreaction blind spots.