Bitcoin [BTC] surged past $85,000 on March 19, as analysts linked the rally to the Federal Reserve’s decision to slow down its pace of quantitative tightening (QT). This move, widely perceived as an ‘indirect interest rate cut,’ has fueled market optimism and reignited bullish sentiment.
Fed’s QT Taper Sparks BTC Rally
Crypto options trading desk QCP Capital highlighted the significance of the Federal Open Market Committee (FOMC) meeting in its daily market report, stating:
Asia Color – 20 Mar 25
— QCP (@QCPgroup) March 20, 2025
1/ Last night’s FOMC meeting delivered the catalyst markets had been waiting for, pushing $BTC past $85K in a sharp rally. The driver? The Fed scaling back quantitative tightening starting in April. Markets see this as an indirect rate cut.
“Last night’s FOMC meeting delivered the catalyst markets had been waiting for, pushing $BTC past $85K in a sharp rally. The driver? The Fed scaling back QT starting in April. Markets see this as an indirect rate cut.”
Jamie Coutts, chief crypto analyst at Real Vision, emphasized the impact of the QT slowdown on US dollar liquidity, noting that declining Treasury volatility and a weakening US Dollar Index (DXY) are highly liquidity-positive developments.
After last night, QT is effectively dead (for some time). Treasury volatility has backed right off and is now mirroring the decline in DXY from earlier this month. This is all extremely liquidity-positive. https://t.co/PYFVf4uLfa pic.twitter.com/PVXCPnstrc
— Jamie Coutts CMT (@Jamie1Coutts) March 20, 2025
What’s Next for Bitcoin?
With Bitcoin bouncing back from recent losses, market watchers are assessing whether this surge is sustainable. Arthur Hayes, founder of BitMEX and CIO of Maelstrom crypto fund, suggested that Bitcoin may have bottomed out at $77K following the Fed’s move. However, he cautioned that stock markets might still face further downside risk:
“The next thing we need to get bulled up for real is either SLR exemption and or a restart of QE. Was $BTC $77K the bottom? Probably. But stocks probably have more pain left to fully convert Powell to team Trump, so stay nimble and cashed up.”
Key Technical Indicators to Watch
From a technical standpoint, BTC reclaimed key moving averages on lower timeframes, reinforcing a bullish shift. However, pseudonymous crypto trader Income Sharks pointed out that BTC must overcome On-Balance Volume (OBV) resistance to confirm strong buying momentum.
Bitcoin bounced at supertrend support. Pretty amazing to see it still holding a buy signal too. Now to see what $BTC does at OBV resistance and diagonal resistance. Would be a clear sign of strength to see a follow through here. pic.twitter.com/h11gRdDwSt
— IncomeSharks (@IncomeSharks) March 19, 2025
“Now, to see what $BTC does at OBV resistance and diagonal resistance. Would be a clear sign of strength to see a follow-through here.”
If BTC fails to break OBV resistance, it may signal weak volume, capping its recovery. Conversely, a volume surge could propel BTC further. QCP Capital also noted that options market sentiment has turned positive but warned that sustained bullish momentum depends on upcoming trading sessions.
“Options markets reflect the shift in sentiment. Call skew is back, reversing from earlier bearish positioning. The key test now is tonight’s US open. Will the rally sustain, or will markets reassess the risks?”
Also Read: Lace Wallet Officially Goes Multichain – Starting with Bitcoin
With traders closely monitoring liquidity dynamics and market sentiment, Bitcoin’s next moves remain critical for sustaining its bullish trajectory.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
