Federal Reserve's "liquidity injection" is imminent—how can retail investors with no money turn things around?

Many people panic when they see bank reserves drop below 3 trillion, thinking the crypto market is about to crash. But having been in this space for 8 years, experiencing 3 rounds of Federal Reserve policy shifts, I want to tell everyone the truth: The current turbulence is not the end, but a “test before dawn”. Those without money might actually have the chance for a reversal.

What exactly has the Fed’s “liquidity pumping” done to the crypto world?

Quantitative tightening (QT) sounds complicated, but it’s basically the Fed withdrawing liquidity. Bank reserves decrease, corporate financing costs rise, and investors’ wallets shrink—these chain reactions directly impact the crypto market because we are inherently the most sensitive risk assets.

Specifically: borrowing becomes more expensive, money becomes scarcer, and market sentiment collapses. Recently, the wild swings are not due to fundamental issues but are purely driven by liquidity tightening.

But here’s a key turning point—Fed officials have already signaled that QT may stop in the coming months. Why? Because bank reserves are approaching the “safety bottom” (around 2.7 trillion). If they keep pumping out liquidity, the market could be drained dry—Fed officials are well aware of this.

What opportunities are hidden within the crisis?

First layer: Short-term volatility is an illusion; the market has no foundation for a crash

Don’t be fooled by daily ups and downs. The current situation is “emotion-driven panic,” not a problem with asset value itself. It’s like a supermarket sale—some rush to buy, others calmly pick up bargains. Crypto is in this state now: funds are tight, borrowing costs high, prices volatile—but that doesn’t mean a crash.

Second layer: When QT stops, it’s a signal that a rebound is starting

I dare say, once the Fed officially announces the end of liquidity withdrawal, liquidity will flood back into the market like a dam breaking. Risk assets will rebound first, and cryptocurrencies are always the most resilient. This seemingly terrifying volatility is actually a “money-making window” for short-term traders and a “position-adding signal” for long-term holders.

In 2020, I capitalized on such turning points, using only 10% of my position to achieve 3x returns—far better than stubbornly holding through the downturn.

No capital? Use these 3 tricks to turn things around

Tip 1: Set a clear trial-and-error limit

Want to participate in short-term fluctuations? Sure, but keep your position within 10% of your total funds. Treat it like a disposable expense—like buying a cup of milk tea—losses don’t hurt, and gains can buy you an extra treat.

Most importantly, set a “stop-loss line”: exit immediately if losses reach 5%, and take profits decisively at 10%. Beginners often make the mistake of greed; quick in-and-out is the key to surviving volatile periods. When I was young, I heavily chased swings and almost lost my living expenses—this lesson is worth more than any analysis.

Tip 2: Lock your large positions into top coins

At least 60% of your capital should be invested in proven, high-consensus mainstream coins—these “hard currencies” can withstand volatility and rebound fastest when liquidity loosens.

Don’t be tempted by short-term surges of altcoins; the market is “washing out the restless.” Small coins lack capital support and often fall more sharply. In contrast, top coins are like the “navy anchors” of the crypto world—able to weather even the most intense turbulence.

Tip 3: Wait for official signals from the Fed

This is my secret judgment: Once the Fed officially announces the end of QT, it’s the starting gun for the market. Then, gradually add to your positions—more reliable than blindly bottom-fishing or panic-selling now. I’ve set alerts from official Fed channels—once there’s an important statement, I’ll get the first-hand info immediately.

Final words: Compared to chasing volatility, these are more important

In my 8 years, I’ve seen too many newcomers panic and sell during swings, only to miss the rebound; I’ve also seen calm, precise positioning that profits from turning points.

The real secret to making money in crypto isn’t speed, but “accuracy” and “stability”. Avoid high leverage (that’s gambling, not investing), don’t chase air coins (they surge faster and fall harder), and don’t let short-term fear trap you.

For those without capital, now is the perfect time to participate in future opportunities with lower risk. The key is to stay alive until that moment, rather than destroying yourself in the turbulence.