In the early hours of December 1, a quiet policy shift set off an explosion in the global crypto market.

The Federal Reserve announced the end of quantitative tightening (QT), shutting down the “drain pump” that had been running for over two years and pulled $2.4 trillion out of the market. As soon as the news broke, Bitcoin soared over 7% that day, blasting past $92,000; Ethereum also climbed back above $3,000. Those who were calling for a “prolonged bear market” just days ago have probably deleted their posts overnight.

This rally came out of nowhere, but anyone in the know understands that the real driver is the shift in liquidity expectations. A look back at history reveals the pattern—after the Fed ended QT in 2019, Bitcoin skyrocketed from $3,800 to nearly $65,000 in 18 months. While history doesn’t repeat itself exactly, the opening act of this play does feel familiar.

However, a closer look at on-chain data shows it’s not that simple. A large amount of Bitcoin’s cost basis is piled up around $84,000, and buy-side strength above that level is actually weak. This rally is mainly driven by short sellers being forced to cover, not by a flood of new long-side capital. In other words, market liquidity is still tight; fast gains don’t necessarily mean stable gains.

To complicate things further, Trump has recently been publicly pressuring the Fed, even calling out Powell by name. A policy shift is already sensitive enough, and now there’s an added layer of political maneuvering, making the future even harder to predict.

Meanwhile, Ethereum is gearing up for something big. The upcoming Fusaka upgrade will activate PeerDAS technology, which is said to slash Layer 2 transaction costs by another 40%-60%. If it really rolls out as planned, Ethereum could reclaim the initiative in the scaling race.

The market is now at a delicate juncture: the tightening cycle is over, but the easing cycle hasn’t truly begun. The valve has been tightened, but the faucet hasn’t been turned on. Macro policy, technological upgrades, and market sentiment are all tangled together, and no one can say for sure what comes next. The tide has shifted, but the big wave hasn’t hit yet—so is this the time to dive in and front-run, or wait on the sidelines for a clearer signal? Everyone might have a different answer.