Will Ceasing Quantitative Tightening Change the Crypto Downward Trend?
The Federal Reserve’s move to pause balance-sheet runoff arrives as pressure builds in the market following a significant dump over the weekend.
According to a report by Reuters, the central bank concluded its quantitative tightening on December 1. The strategy now involves rolling over maturing Treasuries and reinvesting mortgage-bond payments into Treasury bills. The objective is to ensure that reserves remain “ample” as U.S. money markets display signs of pressure.
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Can the Fed’s Shift in Policy Halt the Downward Trend in Crypto?
Officials indicated that this transition should enhance liquidity stability and manage short-term interest rates. However, trading market sentiments remain wary.
As crypto values fall, with momentum firmly established, investors are keenly observing whether these more favorable conditions can slow the downturn.
Under the revised plan, the Fed will cease allowing Treasuries to mature from its portfolio. Payments from mortgage-backed securities will also be redirected toward short-term government debt, thus maintaining the overall size of its assets.
Chair Jerome Powell stated that the bank halted the reduction of its balance sheet as reserves rose “somewhat above” the level required for optimal crypto market functioning. He noted that indicators from money markets suggested this threshold had been met.
The policy alteration was also accompanied by a rate reduction of 25 basis points, adjusting the target range to 3.75%-4.00%. Bloomberg reported highlighted October 29 as a pivotal moment, marking the first instance since 2022 the Fed ceased the reduction of its Treasury assets.
Bloomberg also confirmed the termination of the runoff, pointing out the stress in money markets as the end of the year approaches amid heightened risks.
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Is Bitcoin Dominance on the Verge of Peaking as QT Concludes?
BTC most recently traded around $90,084 following a turbulent trading session. It fell to approximately $83,951 before reaching $90,108.
Ether fluctuated around $2,928, oscillating between $2,723 and $2,928, demonstrating only slight recovery.
U.S. stocks opened with gains on Tuesday as traders anticipated the upcoming Fed meeting.
However, cryptocurrencies failed to keep pace. While Wall Street stabilized early in the trading day, digital assets remained under pressure.
According to a chart shared by Mister Crypto, BTC Dominance (Bitcoin.D) appears to be nearing another potential turning point, coinciding with the conclusion of Quantitative Tightening (QT).
This chart juxtaposes Bitcoin dominance with the Federal Reserve’s balance sheet (WALCL) and indicates a clear trend from historical cycles.
QT ceases tomorrow.
The last instance QT was halted marked the peak for BTC Dominance.
Should history repeat itself, this would bode well for altcoins! pic.twitter.com/BnHv7u8ZIn
— Mister Crypto (@misterrcrypto) November 30, 2025
BTC.D peaked shortly after QT ended. What followed was a consistent decrease in dominance, while many altcoins began a gradual recovery from substantial losses.
Currently, Bitcoin.D is pressing into the same price ceiling level as previously observed. On the chart, this area is marked as “BTC.D Top.”
Price movements around this level indicate that the momentum is diminishing. The trend appears to be stabilizing rather than accelerating.
If this pattern recurs, BTC may begin to lose its crypto market share, potentially signaling the initial phase of an exit from the current pessimistic phase for altcoins.
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The article Will the End of Quantitative Tightening Reverse the Crypto Down Trend? was first published on 99Bitcoins.
