Fed Unleashes $6.8B Liquidity Surge, Catapulting Bitcoin Past $90K Milestone

The central bank's digital firehose just blasted the market—and Bitcoin's price chart is feeling the heat.

Liquidity Finds Its Digital Home

When the Federal Reserve opens the monetary taps, the old playbook says money flows into traditional assets. Not this time. A fresh $6.8 billion injection didn't just slosh around Wall Street; it made a beeline for the crypto ecosystem, acting like rocket fuel for digital asset valuations. The mechanism is clear: cheap, abundant fiat seeks the highest-growth, highest-conviction trade available.

The $90,000 Threshold Breached

The result was a decisive, volatile surge that shattered resistance. Bitcoin didn't just climb—it vaulted over the psychologically significant $90,000 barrier, setting a new cycle high and confirming its role as a premier liquidity sink. This isn't mere speculation; it's capital voting with its wallets, choosing cryptographic scarcity over inflationary traditional finance. Every basis point of yield chased elsewhere suddenly looked a lot less compelling.

A New Correlation Dynamic

For years, analysts debated Bitcoin's correlation to macro policy. That debate is over. The asset now moves in direct, amplified response to central bank balance sheet actions. The $6.8 billion figure isn't just a number—it's the precise amount of pressure needed to blow the roof off the previous trading range. This establishes a new precedent for how monetary policy transmits to digital markets, bypassing traditional intermediaries entirely.

So, the Fed prints, and Bitcoin ticks higher—proving once again that in modern finance, the most cynical take is often just the correct one. The 'digital gold' narrative just got a multi-billion-dollar endorsement from the very institution it was designed to bypass.

Bitcoin reclaims $90K but risk still lingers

The latest move also revives hopes for a “Santa Rally,” with analysts noting strong support from institutional purchases and options positioning. However, resistance remains firm NEAR recent highs, and a sustained break could target $92,000–$95,000 if momentum holds. 

Fueling the market optimism, various crypto analysts have shared their positive stance on Bitcoin’s potential upper side movements. Ted Pillows, a renewed crypto personality, analyzes that the bullish RSI divergence has emerged on Bitcoin’s three-day chart, where the Relative Strength Index (RSI) forms higher lows while prices dip toward the $89,000 level. This signals toward weakening downward momentum. “When this happened the last 2 times, Bitcoin formed a bottom,” trader Ted noted on X. 

$BTC 3D bullish divergence is now confirmed.

When this happened the last 2 times, Bitcoin formed a bottom. pic.twitter.com/z5X2HW0B2k

However, the downside risk still lingers as the crypto market is navigating through macro tension, with spot Bitcoin ETFs witnessing $497 million in outflow last week. Moreover, the whale momentum around Bitcoin has also slowed down, hinting towards cooling on-chain activities following dramatic volatility in Bitcoin and other leading cryptocurrencies in the past two months. 

Federal Reserve’s $6.8B liquidity injection

As per discussions on X, the U.S. Federal Reserve conducted an overnight repo operation on December 22 with a maximum offering of $6.801 billion, accepting bids to provide temporary cash to primary dealers against Treasury collateral. This technical measure addresses typical year-end strains where banks hoard reserves for regulatory and balance-sheet reasons, potentially spiking short-term rates. 

🔥BULLISH: Fed will inject nearly $7 Billion in liquidity tomorrow. pic.twitter.com/Npq8vJ1Pzi

It’s the latest in a series of operations totaling around $38 billion over the prior 10 days, separate from the ongoing $40 billion monthly Treasury bill purchases under the Reserve Management program initiated earlier in December. 

This marks the central bank’s first such repo since 2020, aimed at easing year-end funding pressures. Crypto enthusiasts quickly linked the price spike to the liquidity boost, amplifying bullish sentiment across social media and trading platforms. 

Unlike quantitative easing, these repos are short-term and targeted, expiring the next day. Still, markets—especially crypto traders—view any added liquidity as supportive for risk-on assets. While causation is hard to prove in volatile markets, the Fed’s proactive liquidity management has coincided with renewed Bitcoin strength. It highlights crypto’s sensitivity to central bank actions. 

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