Will the Federal Reserve's injection of $26 billion in liquidity enable Bitcoin to drive a year-end rebound in the crypto market?

The New York Federal Reserve recently injected approximately $26 billion into the market through overnight repurchase operations, reigniting discussions about a year-end rebound in cryptocurrencies. Data shows that this operation included the purchase of about $16 billion in U.S. Treasury securities and $9.95 billion in mortgage-backed securities, signaling short-term easing.

Following the liquidity injection announcement, Bitcoin’s price briefly surged above $90,000 but then quickly retreated, touching a low of $86,700, indicating market caution. As a result, the overall cryptocurrency market trend came under pressure. According to CoinMarketCap data, the total market capitalization of cryptocurrencies is currently around $2.96 trillion, down nearly 1% in the past 24 hours.

If a year-end rebound does not occur, major assets such as Bitcoin, Ethereum, XRP, and Solana may face a full-year decline. So far, Bitcoin has fallen over 6% this year, while Ethereum, XRP, and Solana have declined approximately 11%, 10%, and 36%, respectively, with market sentiment clearly cooling.

From derivatives and prediction markets, the expectation of a year-end rally is weakening. Data from Polymarket shows that the probability of Bitcoin rising to $95,000 before the end of the year has dropped to 3%, while the chance of falling to $80,000 is about 4%, reflecting traders’ preference for sideways movement rather than a unilateral rebound.

Meanwhile, selling pressure signals continue to accumulate. Market reports indicate that BlackRock transferred 2,201 Bitcoins to CEX, worth about $192 million, possibly related to reduction in holdings. Additionally, Bitcoin ETF net outflows persisted in December, with monthly outflows reaching $1.08 billion. Analysts point out that weakening Bitcoin spot CVD and the turn of the premium in leading U.S. CEXs to negative both suggest short-term risks remain skewed to the downside. The year-end rebound in the crypto market still requires more liquidity and confidence support.