Bitcoin bulls may have a reason to stay optimistic as betting markets now indicate a 100% probability that the Federal Reserve will end its quantitative tightening (QT) program before May. According to Polymarket, a popular decentralized prediction market, traders are overwhelmingly betting that the Fed will pivot its monetary policy, a move that could have major implications for Bitcoin and broader risk assets.
With Bitcoin already showing signs of resilience amid macroeconomic uncertainty, could an end to QT be the catalyst for a major BTC reversal?
Why Ending QT Matters for Bitcoin
Quantitative tightening refers to the Federal Reserve’s process of reducing its balance sheet by selling off assets like Treasury bonds and mortgage-backed securities. This policy is designed to combat inflation but often leads to liquidity drying up in financial markets, which historically puts pressure on risk assets like Bitcoin.
However, if the Fed does end QT earlier than expected, it would mean:
- Increased market liquidity, making more capital available for investments.
- Lower borrowing costs, which could drive risk-taking in markets.
- A weaker dollar, which tends to benefit Bitcoin as an alternative store of value.
Given Bitcoin’s historical correlation with monetary easing policies, such a shift could propel BTC to new highs in the coming months.
Polymarket’s 100% Odds: A Strong Signal or Overhyped?
Polymarket’s prediction markets allow traders to bet on real-world events, often reflecting market sentiment and insider expectations. The current 100% odds suggest that participants believe an end to QT is all but guaranteed before May.
While this is a significant indicator of expectations, the final decision remains with the Federal Reserve and Chair Jerome Powell, who have not yet confirmed such a move. That said, recent Fed statements have hinted at a more accommodative stance, fueling speculation that a pivot is imminent.
Bitcoin’s Key Price Levels to Watch
As traders speculate on the Fed’s next move, Bitcoin is hovering around crucial support and resistance levels.
Support Levels:
- $78,000 – A key level that has held firm during recent corrections.
- $73,500 – A deeper support level if selling pressure intensifies.
Resistance Levels:
- $85,000 – The critical barrier that BTC needs to break for bullish continuation.
- $90,000+ – If liquidity returns, Bitcoin could retest all-time highs.
With macroeconomic factors aligning in Bitcoin’s favor, breaking past $85K could signal a strong bullish reversal.
Final Thoughts: Is a Bitcoin Rebound Inevitable?
While Polymarket’s prediction of a Fed QT pivot is compelling, traders should remain cautious. The Fed’s final decision will depend on inflation trends, economic data, and overall financial stability.
However, if the Fed does ease its tightening policies, Bitcoin could see renewed upside momentum, potentially reclaiming previous highs and beyond.
For now, all eyes remain on the Federal Reserve’s next move—and Bitcoin’s response in the coming weeks.
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