Bitcoin surged back to $85,000 this week as the Federal Reserve announced plans to scale back its quantitative tightening (QT) program, sparking renewed optimism among investors. The Fed’s decision to reduce its monthly Treasury securities roll-off from $25 billion to $5 billion starting April 1 injected fresh liquidity into markets, aligning with broader expectations that central bank policies could fuel further gains for risk assets like cryptocurrencies.
The price of Bitcoin climbed from $84,235 to nearly $86,000 immediately following the Fed’s March 19–20 meeting, reflecting traders’ reaction to the central bank’s signals. Analysts highlighted the QT slowdown as a de facto easing measure, with former BitMEX CEO Arthur Hayes asserting that the policy shift likely marked a local bottom for Bitcoin after it briefly dipped to $77,000 earlier in the week. Technical charts now suggest key support near $80,000, while resistance around $85,000 remains a critical threshold for sustaining upward momentum. The Fed’s median projection of two rate cuts in 2025 further bolstered market sentiment, though Chair Jerome Powell clarified that the QT adjustment was a technical move rather than an outright pivot.
Institutional interest continues to play a pivotal role, with spot Bitcoin ETFs—led by BlackRock’s IBIT—recording inflows despite recent volatility. However, derivatives markets saw over $200 million in liquidations as leverage-fueled trading amplified price swings. Analysts remain divided on short-term trajectories, with firms like 10X Research warning of potential retests of $73,000 if support levels break, while others like QCP Capital view the Fed’s liquidity measures as a catalyst for longer-term bullish trends.
As traders position for the Fed’s next moves, all eyes remain on macroeconomic cues and Bitcoin’s ability to hold above $85,000. With the central bank’s balance sheet runoff tapering and rate cuts on the horizon, market participants anticipate renewed volatility paired with upward potential, particularly if institutional adoption accelerates.
Sources:
Bitcoin Consolidates Below $85K as Market Awaits Fed’s Next Move
https://www.ainvest.com/news/bitcoin-surges-20-fed-slows-quantitative-tightening-2503
https://coinfomania.com/bitcoin-crashes-below-85k-amid-surging-leverage-a-trap-for-80k/
https://www.ainvest.com/news/bitcoin-rebounds-10-fed-slows-quantitative-tightening-2503/
Bitcoin reclaims $85k after Fed signals slowdown in quantitative tightening
https://cointelegraph.com/news/bitcoin-runs-toward-86-k-after-fed-maintains-course-projecting-two-rate-cuts-in-2025
