Is The Crypto Bull Market Back? Fed Cuts Interest Rates, Ends Quantitative Tightening

After more than three years of restrictive monetary policy, the US Federal Reserve has officially ended its balance sheet contraction, marking the conclusion of its quantitative tightening program.

Alongside this shift, the Fed cut its benchmark federal funds target range by 25 basis points to 3.75%–4.00%, signalling a cautious pivot toward a more neutral stance.

Despite the dovish policy shift, crypto markets slipped into the red as Fed Chair Jerome Powell struck a notably hawkish tone. Powell stressed that another rate cut in December is “far from a foregone conclusion,” signalling that the central bank remains cautious about easing too quickly.

Bitcoin fell below $110,000, while altcoins like Aster, Ethena and Jupiter are also seeing a sharp sell-off following Powell’s comments. 

However, a December rate cut remains the odds-on scenario, and analysts believe the Fed will begin expanding its balance sheet to support market liquidity. There is now a growing consensus that a new crypto bull run is on the horizon. 

Fed Cuts Interest Rates, Ends QT

In line with the market expectations, the US Fed cut its federal target rate by 25 basis points for the second consecutive month. 

The FOMC statement revealed ideological divisions within the Fed, with Trump’s latest nominee Stephen Miran voting for a 50 bps cut and Jeffrey Schmid voting for a pause. 

The ongoing reduction in the federal funds target rate is expected to ease borrowing costs for institutions and investors alike, potentially paving the way for a broad-based rally in risk assets.

However, it is the central bank’s other decision that is drawing the headlines. For the uninitiated, quantitative tightening refers to the Fed shrinking its balance sheet by letting securities mature without replacement, a move that pulls liquidity out of the economy.

The Fed is now concluding its balance sheet contraction. In practical terms, this means it will stop letting Treasury and mortgage-backed securities (MBS) roll off its books, opting instead to reinvest maturing proceeds to maintain current holdings. 

By halting the runoff, the central bank effectively shifts from withdrawing liquidity to maintaining it, ensuring that reserves in the banking system remain stable.

For markets, the end of balance sheet reduction is widely seen as a liquidity-supportive move. It removes one of the biggest headwinds for risk assets, eases pressure in money markets, and could encourage renewed appetite for equities and crypto as dollar liquidity conditions improve.

Crypto Prices Fall, But The Bull Market Could Be On The Horizon

Fed Chair Jerome Powell’s post-FOMC comments have resulted in a sharp sell-off in crypto prices. 

Powell claims that a December rate cut isn’t a foregone conclusion, signalling a cautious and data-dependent approach. 

However, the CME FedWatch shows that another 25 bps rate cut is still the odds-on scenario. Rates will continue to go down, and with no QT, the borrowing cost is expected to plummet. 

MN Trading’s Michael van de Poppe indicates that investors should buy the dip ahead of a massive rally in the coming weeks. 

Best Cryptos To Buy

A new crypto bull market is on the horizon, and Bitcoin continues to be one of the best buys. 

There is a possibility that the BTC price retests the $100,000, which would be an excellent entry point for sidelined investors, especially considering that top analysts expect it to hit the $150,000 mark this cycle. 

Solana is also in high demand, especially following the launch of its spot SOL ETFs. Currently trading below the $200 mark, experts predict that the SOL price could hit $400 this year itself. 

Similarly, XRP is showing impressive resilience against the broader market bearishness, still trading above the $2.50 mark. Smart money investors are betting that it will hit the $4 mark this bull run. 

Among the low-cap gems, Bitcoin Hyper has emerged as one of the most attractive buys. The HYPER presale has already raised over $25.2 million in short order behind a wave of high six-figure investments from top whales. 

There is a new spotlight on layer-2 projects, as evidenced by the early success of MegaETH, which has raised nearly $1 billion during its public sale. HYPER is another attractive new coin in this sector. 

The top layer-2 coins tend to reach multibillion-dollar valuations, which bodes well for a low-cap asset like Bitcoin Hyper. Many top crypto influencers are backing this new BTC layer-2 coin as the next 10x crypto.