The New Cycle of Money-Making: How Will the Chip Structure Change in Bitcoin and ETH?

2026-01-20 12:05:07

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According to market analysts, the latest $16 billion liquidity injection by the Federal Reserve is not just a regular operation. It is a strategic move that will bring significant changes to the cryptocurrency market.

From Pandemic to Today: The “Water Injection” Pattern

In March 2020, when the pandemic arrived, the Fed began an aggressive liquidity injection that triggered a major bull run. Now, under the same conditions but at a higher intensity, history is repeating itself. The intensity of this monetary stimulus continues to increase, and its market impact can no longer be contained.

The Changing Chip Structure: Who Is Opposing?

The real change lies in the new chip structure. The skill set now is different—institutional investors hold a significant portion of Bitcoin and ETH. This means that the market dynamics have fundamentally shifted. Short sellers are no longer as powerful as they once were.

Short Squeeze: The Inevitable Result

When prices rise in this setup, a short squeeze is sure to happen. Companies with sufficient funds strategically leverage down and buy at lower prices, while early short positions face two-tier losses. The initial short sellers close with minor losses, but subsequent waves close with massive losses. Ultimately, the unity of short sellers has broken apart and become fragmented.

This cycle is a natural result of monetary expansion combined with a new market structure filled with institutional players.

BTC-1,35%

ETH-2,64%

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