BTC Traders Remain Skeptical as Powell Indicates Quantitative Tightening Could Be Ending

BTC Stays Flat Despite Powell Hinting QT Near End

Bitcoin remained largely flat near $112,600 Tuesday, even as Federal Reserve Chair Jerome Powell signaled that the central bank may soon conclude its quantitative tightening (QT) program. Derivatives data point to ongoing bearish sentiment, with puts still trading at a premium over calls.

Powell stated that the Fed plans to halt balance sheet runoff once reserves remain “somewhat above the level we judge consistent with ample reserve conditions,” signaling careful monitoring of liquidity conditions to maintain financial stability. Since 2022, QT has reduced the Fed’s balance sheet from $9 trillion to $6.6 trillion.

Markets interpreted Powell’s remarks as dovish, with the 10-year Treasury yield falling to 4%, the dollar index slipping to 98.75, and gold climbing past $4,200/oz. Despite expectations of two 25-basis-point rate cuts by year-end, BTC’s muted reaction suggests that the end of QT does not immediately translate into bullish momentum for crypto.

Analysts note that QT has already slowed considerably since mid-2024, with Treasury and MBS redemptions capped, meaning the Fed’s balance sheet reduction is unlikely to create a sudden market surge.