Despite the Federal Reserve’s $37 billion liquidity injection, the crypto market is still in a bearish mood. Since last Friday, the Fed has injected more than $37 billion into the banking system. On Friday alone, $29.4 billion was added to the banking system, the largest daily liquidity injection since the dot-com bust. However, the crypto fear-greed index has fallen to its lowest level since April 2025, at 21, indicating intense investor fear.
While Bitcoin has fallen by about 5% and Ethereum by nearly 9% in the past week, analysts see the reason for this discrepancy in the contradictory policies of the Federal Reserve, as at the same time as injecting liquidity, the US central bank has removed more than $75 billion from the market through reverse repurchase operations.
These measures have made it more difficult to secure liquidity in the short term, and many financial institutions have chosen to temporarily hold their money with the Federal Reserve rather than invest it in risky markets like cryptocurrencies. The result is increased fear, reduced effective liquidity, and selling pressure on the crypto market.
