Bitcoin Braces for Fed Balance-Sheet Shift as Liquidity Cycle Turns

The Federal Reserve's decision to end its quantitative tightening program has positioned the crypto markets at a crucial juncture, with implications for Bitcoin's future. Analysts warn of potential short-term volatility but generally foresee a positive long-term outlook. Unlike the post-Fed pivot of 2019, the current environment features higher interest rates and increased institutional demand, which could amplify Bitcoin’s appeal. Experts note that while political factors, such as the U.S.-China trade war, could induce immediate market fluctuations, overall easing from the Fed is seen as beneficial for Bitcoin holders. The expectation of future rate cuts, coupled with a favorable macroeconomic setting, could propel Bitcoin beyond its current trading range of $105,000 to $115,000, with some forecasting a target of $200,000 by the third quarter of 2026. The dynamics differ significantly from those in 2019, when the market lacked substantial institutional investment. As a result, investors now face divided sentiments, with some opting to sell while institutions continue to accumulate Bitcoin, anticipating a bullish turn in the market.

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