$16B Fed injection meets BTC/Gold 11-year low – Rare buying signal?

Liquidity is drying up throughout the market, and the stablecoin market cap makes it clear. Practically $10 billion has been erased for the reason that 2026 cycle started, underscoring rising investor warning.

Zooming in, Ethereum [ETH] tells an identical story. It’s essentially the most liquid chain, holding over 50% of stablecoin dominance, but it’s nonetheless down round 6% on the 12 months, additional proof that the crypto market is tightening up.

The influence is evident. DeFiLlama exhibits total value locked (TVL) is down $20 billion, again to pre-election ranges, signaling a transparent pullback in liquidity and indicating that capital simply isn’t flowing into DeFi prefer it used to.

Supply: DeFiLlama

Total, low liquidity is a significant factor behind the crypto market’s cautious temper. Towards that backdrop, information of the Federal Reserve injecting $16 billion in liquidity this week was sufficient to spark a market frenzy.

What makes the timing much more fascinating is that the injection comes proper after current macro knowledge, just like the U.S. Shopper Value Index (CPI), confirmed cooler inflation, pushing the Fed to step in and add recent liquidity.

In accordance with AMBCrypto, it is a much-needed lifeline for the crypto market. Liquidity has been pulling again sharply, and naturally, recent capital might assist enhance markets whereas creating new alternatives for buyers.

The larger image? This injection additionally ties into one other key improvement.

Crypto market indicators uncommon BTC accumulation alternative

Zoom out, and Gold (XAU) continues to be up round 14% to date this 12 months.

Even with the current sell-offs, it’s solely down 12% from its late January peak at $5.5k. In the meantime, Bitcoin [BTC] has taken a bigger hit, correcting 22% over the identical interval, which has pushed the BTC/Gold ratio even decrease.

The consequence? The month-to-month BTC/Gold RSI has hit an 11-year generational backside. In actual fact, for the primary time, the ratio has printed 7 straight crimson month-to-month candles, exhibiting an excessive stage of relative underperformance.

Supply: TradingView (BTC/Gold)

Naturally, crypto market analysts are calling this a uncommon Bitcoin alternative.

What makes it much more fascinating is that it aligns with the $16 billion liquidity injection, giving bulls a possible edge to spark a rally in danger belongings as sentiment slowly recovers from the “excessive” worry zone.

Furthermore, low liquidity within the crypto market means even modest inflows might flip bullish. Nonetheless, fundamentals remain crucial earlier than worth motion displays it. In accordance with AMBCrypto, the BTC/Gold ratio stands out as the catalyst to spark motion.

Last Abstract

• Stablecoins are down, and DeFi TVL has dropped $20 billion, exhibiting capital is pulling again, and the crypto market stays cautious.
• The BTC/Gold ratio hit an 11-year generational low, aligning with the Fed’s $16 billion liquidity injection, organising a possible Bitcoin accumulation zone.