The crypto market is bracing for a potential shake-up as investors closely watch the Federal Reserve’s upcoming monetary policy decisions. Renowned analyst Michaël van de Poppe recently highlighted the crucial role of the Fed’s stance on Quantitative Easing (QE), Quantitative Tightening (QT), and interest rate changes in shaping Bitcoin and altcoin movements.
If the Fed halts QT or announces rate cuts in the next few months, it could trigger a major bullish rally across the crypto market. This expectation is already reflected in the declining U.S. Dollar Index (DXY), a sign that the dollar may be weakening—historically a strong signal for Bitcoin and other digital assets to rise.
Bitcoin & Ethereum React to Fed Speculation
As of now, Bitcoin is trading at $65,200, while Ethereum stands at $3,800. Both have seen an uptick in trading activity, with Bitcoin’s 24-hour volume at $24.5 billion and Ethereum’s at $10.2 billion. The growing anticipation of Fed policy shifts is pushing traders to position themselves for potential gains.
If history is any guide, the market’s reaction to QE could be significant. Back in March 2020, when the Fed introduced QE, Bitcoin’s price surged 30% within weeks. A similar scenario now could mean another wave of strong buying momentum.
Technical & On-Chain Indicators Signal Strength
Technical indicators are also painting an interesting picture. Bitcoin’s RSI (Relative Strength Index) is at 68, approaching overbought levels but still below the 70-mark that typically signals a correction. Ethereum’s RSI at 62 also suggests strong momentum.
The MACD (Moving Average Convergence Divergence) for both Bitcoin and Ethereum is trending positive, indicating continued bullish sentiment. Meanwhile, on-chain data further supports this outlook:
- Bitcoin’s hash rate hit an all-time high of 300 EH/s, showcasing strong miner confidence.
- Ethereum’s DeFi market is booming, with the total value locked (TVL) surging to $100 billion, up 5% in the past week.
AI Tokens Ride the Momentum
It’s not just Bitcoin and Ethereum—AI-related tokens like SingularityNET (AGIX) and Fetch.ai (FET) are also seeing a boost. On March 19, AGIX rose by 3%, while FET climbed 2.5%, mirroring the broader crypto market’s optimism.
The increased interest in AI-driven trading strategies is also fueling excitement. A new AI-powered trading algorithm announced by QuantConnect has already led to a 10% jump in AI token trading volumes, proving that innovation in the sector is drawing fresh capital.
What’s Next?
Market analysts believe the Fed could raise rates as early as June, but some, like HSBC’s Fred Neumann, see an earlier move possible. Any surprise rate cut or QE announcement could send crypto soaring.
For now, all eyes are on the Fed’s next statement. If policymakers pivot toward easing, Bitcoin and altcoins could be on the verge of a major breakout—a moment traders and investors don’t want to miss.
