The U.S. Federal Reserve is set to inject approximately $55.3 billion in liquidity into the financial system over a three-week period spanning late January to mid-February 2026. The operation will be executed through Treasury bill purchases and reserve management tools, a move analysts describe as a supportive measure for markets following an extended period of tightening, though it is not officially labeled as quantitative easing.
The injection is expected to prevent sharp market declines and create a base under asset prices, including cryptocurrencies. Prominent crypto analyst Lark Davis highlighted the move on social media, calling it "GIGA BULLISH." The increased system liquidity is anticipated to raise demand for higher-yielding, risk-based assets, with capital potentially flowing into digital currencies.
Concurrently, the crypto market is exhibiting a range-bound, steady pattern. Bitcoin is trading between $92,000 and $95,000, while the total crypto market capitalization remains near $3.1 to $3.2 trillion. Analysts note this stability is the result of opposing forces: the Fed's liquidity providing support, while economic pressures from U.S. tariffs introduced in 2024-2025 act as a drain on household and trader risk capital.
XRP is highlighted as a potential beneficiary. The token has held above the $2.00 support level, reaching a high near $2.41 in early 2026. Institutional interest is evidenced by spot XRP ETFs, which have seen daily inflows since their late 2025 launch, accumulating $1.21 billion in total net assets. Coupled with XRP exchange reserves falling to multi-year lows, analysts suggest a supply crunch could amplify price volatility if demand increases post-liquidity injection. A break above the $2.35 resistance could open a path toward $3.00.
The broader macro environment shows global money supply (M2) growing at 11.4% year-over-year, an improvement but still below the 14% threshold historically associated with major crypto bull runs. This indicates there is some fuel for the market but not enough for a full rally. The market is expected to remain in a slow, patient state until one force—either significantly increased liquidity or eased economic pressure—becomes dominant.
