Bitcoin surged past $85,000 on March 19, 2025, reclaiming a key price level after the Federal Reserve announced plans to slow its quantitative tightening (QT) program. The recovery followed the Federal Open Market Committee’s decision to reduce its monthly Treasury securities redemption cap from $25 billion to $5 billion starting in April, signaling a shift toward easing monetary conditions. Analysts interpreted the move as a de facto interest rate cut, injecting optimism into risk assets like cryptocurrencies.
The Fed’s dovish pivot came alongside projections for two potential interest rate cuts in 2025, with Chair Jerome Powell emphasizing ongoing inflation concerns despite lowering economic growth forecasts. Markets reacted swiftly, with Bitcoin climbing 3.5% within hours of the announcement and traditional indices like the Dow Jones Industrial Average gaining 400 points. QCP Capital described the Fed’s stance as a critical catalyst, noting the central bank’s balance sheet adjustments would improve dollar liquidity—a key driver for cryptocurrency valuations.
Former BitMEX CEO Arthur Hayes declared the $77,000 low reached earlier in March likely marked Bitcoin’s price floor, stating QT had “effectively ended.” He predicted further upside potential if policymakers reintroduce measures like the Supplementary Leverage Ratio exemption or restart quantitative easing. Real Vision’s Jamie Coutts echoed this sentiment, highlighting reduced Treasury market volatility and a weaker U.S. dollar index as tailwinds for Bitcoin’s liquidity-sensitive market structure.
Bitcoin’s rebound to $86,000 reflects renewed institutional confidence, with crypto-linked equities and derivatives products showing increased activity. Market participants now watch for sustained breaks above $87,500 as technical analysts debate whether the rally can extend toward $90,000. The Crypto Fear & Greed Index shifted to neutral territory at 49 points after weeks in the fear zone, suggesting sentiment stabilization. With FOMC meetings historically correlating with Bitcoin volatility, traders anticipate continued price sensitivity to macroeconomic developments through Q2 2025.
Sources:
https://www.ainvest.com/news/bitcoin-surges-20-fed-slows-quantitative-tightening-2503
https://cn.m.netdania.com/news/Bitcoin%20reclaims%20$85k%20after%20Fed%20signals%20slowdown%20in%20quantitative%20tightening/Buzz%20FX/%7Bna:%5B%7Bt:%5B%22BUZZ_FX_GF%22%5D%7D%5D,hf:0%7D/tcnews/8be46ec53824f685198cf9af0f105c458dfe83f0@%7B%22Syms%22:%5B%5D,%22Inf%22:%7B%22PBL%22:%22CryptoSlate%22%7D%7D/1742419826
https://cointelegraph.com/news/bitcoin-runs-toward-86-k-after-fed-maintains-course-projecting-two-rate-cuts-in-2025
