Bearish BTC Sentiment Persists Despite Powell’s Signal That 'QT' May Be Nearing End

Group 1 - The Federal Reserve may soon end its balance sheet reduction program as it approaches a level of reserves deemed consistent with ample conditions [2][4] - The quantitative tightening (QT) initiated in 2022 has reduced the Fed's balance sheet from approximately $9 trillion to $6.6 trillion [3] - Powell emphasized the importance of maintaining bank reserves above a certain threshold to ensure financial stability and avoid disruptions in short-term funding markets [4] Group 2 - Markets are anticipating two 25-basis-point rate cuts by year-end, which has generated bullish sentiment in crypto social media [5] - Despite these developments, Bitcoin (BTC) remains unimpressed, trading near $112,600 with bearish sentiment reflected in options pricing [6][7] - The pace of QT has slowed since mid-2024, with limited monthly redemptions of Treasuries and a maintained cap for mortgage-backed securities, indicating that the end of QT may not lead to significant market changes [8]