Fed repurchase operations injected $29 billion, the Central Bank has record point shaving: Bitcoin waits for macro Favourable Information to explode

The two major central banks in the world are injecting liquidity into the market on an unprecedented scale. Last Friday, the Fed injected $29.4 billion into the U.S. banking system through overnight repurchase operations, setting a record for the highest single-day injection since the dot-com bubble. Meanwhile, the People's Bank of China (PBOC) also deployed a record cash injection to support the domestic banking sector. These coordinated liquidity actions are viewed by traders as a turning point for global risk assets, especially Bitcoin (BTC), with the market closely following how central bank policies will set the tone for the market before 2026.

Fed Repurchase Operations: Market Tensions and the Subtle Balance of Monetary Policy

The Fed's unusual large-scale overnight repurchase operations reveal the growing pressures in the short-term credit market and may provide liquidity support for risk assets such as Bitcoin.

• Record Repo Operations: The Fed's overnight repurchase operation on October 31 injected $29.4 billion, setting a single-day record high in decades, reflecting the tensions in the Treasury bond sell-off and short-term credit markets.
• Stabilizing Market Risk: Repurchase operations allow institutions to exchange securities for cash, providing immediate liquidity during market stress and limiting systemic risk.
• Expectations for interest rate cuts rise: Fed Governor Christopher Waller recently called for a rate cut in December, in stark contrast to previous hawkish remarks by Fed Chairman Jerome Powell.
• Interest rate cut expectations fluctuate: Polymarket data shows that the probability of a third rate cut in 2025 has decreased from 90% to 65%, indicating volatility in monetary policy expectations. If the Fed fails to meet easing expectations, the market may face a sharp correction.

Central Bank of China Injects Liquidity: Global Liquidity Expansion Drives Asset Inflation

The large-scale cash injection by the Central Bank of China, as part of the global liquidity expansion, has provided additional macro momentum for risk assets such as cryptocurrencies.

• Record Cash Injection: The Central Bank of China executed a record cash injection into domestic banks, aimed at supporting economic growth in the context of weak demand. This move is intended to address deflation and the weakness in the real estate sector.
• Stimulate economic growth: By providing additional funds, the Central Bank of China aims to reduce borrowing costs and stimulate credit growth.
• Asset inflation potential: This stimulus measure has expanded the global money supply, which may drive asset inflation in stocks and cryptocurrencies.
• Historical correlation: Historically, the synchronized liquidity boosts by the Fed and the Central Bank of China often precede significant bull markets in Bitcoin.

Bitcoin Outlook: Macroeconomic Liquidity Becomes the Core Driving Force

Against the backdrop of actions by the two major Central Banks, the ongoing expansion of global Liquidity is crucial for the long-term macro outlook of Bitcoin.

• Derivatives market cautious: CoinGlass data shows that Bitcoin's open interest has decreased from over 100,000 contracts in October to nearly 90,000 at the beginning of November, indicating a cautious attitude among derivatives traders.
• Favorable environment: If global liquidity continues to grow, coupled with a decrease in inflation in the US, it will be beneficial for risk-taking. Many institutional investors have viewed Bitcoin as a store of value.
• Risk Factors: If the Fed reduces liquidity too early through tapering or unexpected rate hikes, any upward momentum in Bitcoin may quickly dissipate. Similarly, if China's stimulus measures fail to take effect, global risk sentiment will weaken.

Conclusion

The synchronized large-scale liquidity injection by the Fed and the Central Bank of China has created a potentially favorable macro environment for Bitcoin. As global central banks grapple with a difficult balance between inflation control and financial stability, the continued expansion of liquidity provides a strong bullish narrative for Bitcoin, serving as a hedge against the erosion of purchasing power of traditional currencies. The policy direction of central banks in the coming weeks will be a key factor in determining whether Bitcoin enters a new bull market or continues to consolidate in 2026.