Bitcoin (CRYPTO: BTC) is trading around $113,000 ahead of Wednesday’s Federal Reserve meeting, with traders watching whether the Fed’s stance on quantitative tightening (QT) or rate cuts will shape the next leg of the crypto rally.
What Happened: In his latest podcast, analyst Benjamin Cowen said the Fed’s QT decision could have a far greater impact on Bitcoin than the widely expected 25-basis points rate cut.
Continuing QT, he argued, would likely support Bitcoin dominance, while ending it might spark capital rotation into altcoins, a potential sign of a cycle peak.
Cowen compared the current setup to 2019, when Bitcoin topped months before QT ended.
This cycle, Bitcoin’s bull trend and rising dominance have both unfolded under ongoing QT.
While JPMorgan expects QT to end soon, Goldman Sachs sees it extending into 2026, keeping markets divided.
Also Read: Bitcoin Dominance Nears ‘Explosive Phase’ — Here’s What It Means For You
Why It Matters: Cowen says Bitcoin’s so-called “blue-chip rotation” depends less on rate policy and more on how long liquidity tightening persists.
He also noted the Fed faces a tricky balance, cutting rates amid inflation uncertainty and incomplete economic data from the recent government shutdown.
Trader Daan Crypto Trades added that the 25-bps cut and another rate cut in December are already priced in, and short-term volatility may follow as leverage resets.
He said markets will be focused on Powell’s post-meeting remarks, especially any hints on QT timing or early signals about future quantitative easing, though the latter remains unlikely for now.
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