Bearish BTC Sentiment Persists Despite Powell’s Signal That QT May Be Nearing End
- Federal Reserve Chairman Jerome Powell indicated that the central bank may soon halt its balance sheet reduction, currently at $6.6 trillion, down from approximately $9 trillion.
- Markets anticipate two rate cuts of 25 basis points by year-end, following a similar reduction in September.
- As of now, Bitcoin (BTC) trades near $112,600, showing little movement over the past day.
- Deribit options data shows one-week puts for BTC trading at a premium to calls, indicating bearish sentiment among traders.
- The pace of quantitative tightening (QT) has slowed since mid-2024, with Treasury redemptions capped at $5 billion monthly.
Powell’s comments suggest that the Fed is closely monitoring market conditions before deciding on the future of its balance sheet policies. Despite this potential shift in monetary policy, Bitcoin’s performance remains muted amid ongoing bearish sentiment in the crypto market.
With BTC trading flat and derivatives reflecting negative sentiment, the anticipated end of QT does not seem to be boosting investor confidence significantly.(Source)
