Transcription
The market is about to make an unexpected move, in my opinion, very soon, and that will be great for the markets. I am ATRID, a financial analyst for 7 years, specializing in the crypto market. I bring information to my community and to YouTube so that you can better manage how you approach cycles, see what's going to happen, and how you manage your portfolio and choose your cryptos. Just before we start, thank you. We've just passed 12,000 subscribers on YouTube, so that's great. For those who are not subscribed, know that it's the best way to thank the team for the skills and information they provide you week after week. Access to the private group is still open. It will allow access to Discord. You have the links in the description of the website www.millennium-crypto.fr. You just need to subscribe and you can join the completely private Discord where you can discover all the members' opinions. There are dozens and dozens of them. Some have joined the community months and months ago, others much more recently, and we do everything for the community. Macro analysis, on-chain analysis, technical analysis, we share our portfolio, buy points, sell points. In short, we do absolutely everything for you with about four to five times more input than what you can find on YouTube.
Regarding the unexpected move, I'll clarify right away, what I'm showing you here won't necessarily be 100% guaranteed, but given everything we have, it really reminds me of the 2019 narrative. I've already told you this if you follow my videos. And personally, the scenario I'm pricing is a more positive scenario than what people expect. What we're expecting right now is a rate cut this week. You can see it's priced at 87.2% for a rate cut of about 0.25 points. For January 28th, you can see that currently, the most probable scenario is that we stay in this rate range, and that's where I'm pricing a different move. The move I'm pricing, and which will be different in my opinion, is that on January 28th, we will once again have a rate cut. So I would position myself more in this range of 25% who are betting on a cut on January 28th. But what I'm most pricing right now is not only a 0.25 rate cut for next Wednesday and between December 10th and January 28th, the announcement of the Fed's resumption of QE.
Let's just repeat for those who are discovering this video. The Fed said it would stop QT on December 1st, 2025. But what it also said is that for the assets whose contracts it lets expire, on one hand MBS, on the other Treasury Bills, Bonds, and Notes, it will continue to let MBS expire in favor of Treasury Bills. This means that all the money expiring from MBS, about 35 billion per month currently, and which it was letting flow gently but surely over time, well, it will take 35 billion and buy T-Bills. So, when we zoom in on the Fed's assets, there is indeed one asset that will be in QE, T-Bills, another asset that will be in QT, MBS. But at the level of the balance sheet in total, we will see a balance sheet that will be more or less flat, as here, meaning no increase in the asset balance, no decrease in the asset balance. What I'm telling you is that in addition to this mechanism, I'm pricing that between Wednesday and the January meeting, the Fed will announce a resumption of QE focused on Treasury bonds, focused on Treasury Bills. And what makes me say this are two things. The first is the narrative we are evolving in, which is remarkably similar to after 2019. You can see here, we had the 2018 bear market, the bull run recovery in 2019, and we had a big period of turbulence here. Now, what interests me is to initially look at what caused the turbulence, and the turbulence was due to collapsing bank reserves. We repeat, if you follow this channel and, by extension, you are part of the private community, we've been telling you for months now that QT would stop between December and January and that the narrative leading the Fed to have a much more dovish policy, meaning in favor of market expansion and liquidity creation, is not unemployment rates, it's not global economic production rates, it's bank reserves. Bank reserves are what you have here, and they are gently collapsing. It's the cushion on which all banks are sitting. You can see it's been collapsing since around July 2025, we were at about 3.4 trillion in bank reserves, and you see we've gone from 3.4 to 2.8. What that means, and you see the chart is starting to become really bearish, is that banks have no more cushion, they have no more money, and this forces the Fed to intervene in what's called the Repo Market. This is also a chart we look at very often together. Basically, it's a market where the Fed can intervene daily to help banks that would otherwise go bankrupt. And in fact, the more the Fed has to intervene in this market, the more it tells us about the fragility of the liquidity that banks possess. You can see, the biggest spike was last October, October 31st, we had almost 50 billion dollars injected in one day. And you can see that since November, we've had almost daily interventions, a sign that banks indeed need easing, need liquidity creation, and there are two ways to create liquidity. The first way, of course, is to lower rates, but lowering rates will improve credit conditions to boost the economy at all levels. And if you want to create bank liquidity, the most effective way to make it happen immediately is through QE, where the Fed buys back securities held by banks, MBS, Treasuries, bonds, notes, whatever, because the exchange for cash will be immediate. It will be immediate and it will be month by month. And what we can observe on this graph is that in 2019, here we had two things. Bitcoin trading just here, and below it, the Fed's balance sheet, here in pink, which was also in QT, and in blue, bank reserves in US banks. And what we see is that they were falling, falling, falling, falling until a point where it created panic in the market here between September and October 2019. Panic means that, of course, we had a market resolution movement, which was a bearish resolution movement in the panic, which over 4-5 weeks led to a -25% to -26%. And the Fed intervened right here in the week of October 7th, more precisely right here on October 11th, 2019. It intervened and said things that were remarkably similar to today. The first thing was that they would buy Treasury Bills to maintain bank reserves at least at the September 2019 level. So this will be very important because the September 2019 level is this level here, about 3.27 trillion dollars in bank reserves. You'll see why it's important. The formula is written here. We'll come back to it in a few seconds. That was the first goal. That was the Fed's target for bank reserves. The second goal, and to avoid reaching that goal, there was something very simple. It was both a recovery, it was stimulus, but not just any stimulus. You can see it right here, I've marked it so you don't have to strain your neck and turn your head. RMP not QE. RMP is something very important called Reserve Management Purchase, which is not QE in itself. It's not quantitative easing, but it's the same thing. Reserve Management Purchase allows the central bank, the Fed, to buy assets in order to build up reserves. So they use the term RMP to avoid saying they are doing QE, but in practice it's QE because they are buying assets. You can see from the moment they started doing it, the balance sheet here rose until Covid. Then there was an acceleration and a clear and unequivocal announcement of QE, even if before it was a kind of hidden QE. And that restarted the engine. It clearly restarted the engine. We then had, of course, corrective phases because there was the FUD related to the ban on cryptos from China at a time when, for those who were already here, you remember, China played a leading role in the expansion of the crypto market, and there was this famous news of China's ban. Despite China's ban, we can see Bitcoin recovered directly and went back on a bullish trajectory. It slowed down a second time. New Black Swan event, Covid, and despite Covid, it recovered and we moved on. I firmly believe that if we hadn't had the China FUD and Covid, we would have taken off right here in the weeks following the RMP, we would have been off for another round and we would have been off for a bullish extension, perhaps less strong than what we experienced in 2021 because, of course, it would have led to less stimulus if Covid hadn't happened, but on a bullish dynamic nonetheless. And where it's newly important is to talk about bank reserves again. Bank reserves are very, very important, and some time ago, I showed you a document from one of the Fed governors explaining what happened in 2019 and why they couldn't let things go as they did in 2019. This governor said the following. He said that bank reserves held with the Fed, for which you have the chart right here clearly and simply collapsing, well, these bank reserves must be balanced against the US GDP. They must follow the GDP's trajectory and absolutely not fall below a certain threshold as a percentage. In 2019, Jerome Powell, in this statement dated October 11th, 2019, said that the goal of doing RMP was precisely to maintain bank reserves at the September 2019 level. In September 2019, we were right here, and bank reserves with the Fed were around 1.5 trillion dollars at a time when GDP stood at 21.7 trillion. You have the calculation right here, and that made bank reserves about 7% of GDP. Currently, we have about 2.8 trillion dollars in bank reserves on a GDP of 30.4 trillion, which makes it a little over 9%. This famous Fed governor, whom I presented to you in another video, stated the emergency threshold between 8 and 9%. So, we're not there yet, but we have to admit that we are extremely close at a time when, the first time this happened in 2019, they realized it was too late. We were well below the catastrophic threshold, which led to markets correcting more sharply, which led the Fed to react after the catastrophe, and currently they are reacting more or less beforehand.
So again, what's complicated is that at the level of bank reserves, lowering rates, as I told you just before, takes time. We lower rates, it boosts the economy little by little, especially credit conditions. If liquidity needs to be injected directly into the financial system, it's thanks to QE, it's thanks to RMP, you know, it's a synonym. And so that's why, in my opinion, the Fed doesn't have much choice but to announce RMP/QE to directly inject liquidity and stay durably above the 9.3% threshold, even regain the 10%, 11%, 12% threshold to be more or less safe and avoid catastrophe. It needs to do it now. And so that's why I personally am taking this bet that not only will we have 0.25 next Wednesday, but that Jerome Powell will announce between the Wednesday meeting and the January 28th meeting the resumption of RMP/QE at amounts to be determined. In my opinion, he won't start the engine directly because there's nothing like Covid, but he will start the engine in a way that a QE starts like this. And we don't need much more. We don't need much more. Why? Because you can see, this is a chart I've already shown. Changes in liquidity creation worldwide year after year are starting to resume a more or less dizzying ascent. We are about to make a new ATH in terms of global liquidity, and the Fed, through this dual mechanism of RMP QE and rate cuts, will inevitably have a positive impact on these charts, which will go up. What's also more important here is that there's a psychological aspect. Very large portfolios, large hedge funds, large banking institutions that currently hate one thing, risk and uncertainty, need a psychological signal. That is, guys, okay, go, we're entering a period where money is being created again, where we're here to back you up, we're here to support you, and that's what the Fed can do. So announcing a resumption of RMP or QE will give the indication that a new cycle of liquidity creation is underway, where we had finished one until 2024-2025, and banks need this psychological trigger to say, "Okay, let's unleash the dogs, let's invest even more as happened in 2020-2021." So be careful, don't make the shortcut that because this happened and in 2020-2021, we had 2 years of gains. I'm not saying we'll have 2 years of gains. What I've been saying from the beginning and my position hasn't changed is that we will have a Q1 2026, or even potentially Q2, and then we'll see because we don't have the data that will be very positive in my opinion. Now, with or without liquidity creation, there will come a time when a sector will crash. It could be the real estate sector, it could be purely the AI that everyone is talking about, but there is certainly a sector that will collapse along the way. So we'll have to follow the data, and I don't think we'll go further than 2026. Mid-2026, this famous peak will arrive, followed by a bear market, and it will catch everyone off guard because I see a lot of people switching to bear mode now when there's no reason to be. All these people risk switching back to bull mode once we do exactly what I'm telling you during Q1 or even potentially Q2 2026. And that's where the trap will be set, where the most people will be trapped in risky markets, S&P 500, NASDAQ, but especially crypto because that's what's doing the most damage right now. So, as usual, if you want to be kept informed in the best way, subscribe, come join us on Discord. All information is updated in real time. We do a live every Thursday evening, we have two voice channels of at least 1 hour to 1 hour 30 where I'm live with you. You ask me all your questions, I answer them directly. There's no passivity like on YouTube, we participate, we interact live.
Regarding Bitcoin, we'll finish with that. There's a lot, a lot to do and say about BTC. I'll stick to one analysis; the big analysis will be done for the community. But you see exactly what I told you. We are on Bitcoin here in 3 months, and you can see that the liquidity to be sought below has been taken. The vast majority has been taken, and now what remains above remains above, towards $140,000. So this first scenario where people switch to bear mode, we are building a bottom now where everyone is more or less indifferent or even very apprehensive. And we see this on the charts, people aren't positioning themselves, they're afraid, they're waiting for confirmations. Why not reverse the current sentiment, go and scrape these ATHs here during Q1, Q1, Q2 2026, then reverse once we're there. That's the music of the future. We'll see. For now, what we can say in the very short term is that here, at the level we are currently, it's a zone where a lot of open interest has opened. You can see here, we're at 772 million open interest. So we know that within that, there are shorters, and there are also longs. There's a majority of shorters, however, because you can see that the zone strengthens every time we go down, except here. But well, we went from 684 to 777, so it's not the biggest part of the zone. So passing this first zone here opens up a boulevard for us to higher levels. Now, higher levels is all well and good, but how high? That's the question. And in the short term, in any case, with today's data, because this data changes every day. So, we always come back to the same reminder. And if you want to see this data every day, subscribe to the community and join us. We see that the biggest chunk to deal with is here at the level of $111,000 to $114,000 where we have 1 billion and even 820 million. That's almost 2 billion in open interest open in this big range just before the imbalance, just before the ATH, which will also likely be defended a bit with almost 800 million in open interest. If we pass this zone here, and I think we will, it's very likely that something quite significant will happen here. In any case, this is the data at the moment. So, that's it, I'll stop here. I hope you enjoyed the video. If so, give it a thumbs up, leave a comment, subscribe, come join us on Millennium, and we look forward to welcoming you to do good work together and make the most gains possible in the years to come. This is Atrid. Have a great start to the week.