According to The Kobeissi Letter, the Federal Reserve’s balance sheet has declined by $17 billion over the past month, reaching $6.7 trillion, which is the lowest level since April 2020. Since April 2022, the Fed has reduced its balance sheet by $2.3 trillion, or 25%. This ongoing quantitative tightening directly impacts crypto market liquidity, as reduced liquidity in traditional markets often translates to lower risk appetite for digital assets like Bitcoin and Ethereum. Traders should monitor these macroeconomic shifts, as tightening financial conditions historically correlate with increased crypto market volatility and potential downward price pressure. (Source: The Kobeissi Letter on Twitter, May 9, 2025)

According to The Kobeissi Letter, the Federal Reserve's balance sheet declined by $17 billion over the last month, reaching $6.7 trillion, the lowest since April 2020 (source: @KobeissiLetter, May 9, 2025). Since April 2022, the balance sheet has been reduced by $2.3 trillion or 25%, representing nearly half of the $4.8 trillion the Fed purchased during pandemic-era quantitative easing. For crypto traders, this sustained quantitative tightening signals reduced liquidity and could increase volatility across Bitcoin, Ethereum, and altcoins as dollar liquidity tightens. Monitoring the Fed's balance sheet reductions is essential for anticipating crypto price swings and risk management.

According to Crypto Rover (@rovercrc), the altcoin season has not yet begun, while Bitcoin dominance is currently at its cycle top, indicating a potential shift in market dynamics. Retail investor participation remains low, which could leave room for increased inflows as market sentiment changes. Additionally, gold prices have not peaked, and the Federal Reserve is still conducting quantitative tightening (QT), both of which may influence risk asset flows, including cryptocurrencies. Traders should monitor these macro factors, as the absence of retail and ongoing QT suggest that significant market moves could still be ahead (Source: Crypto Rover on Twitter, May 8, 2025).

According to Cas Abbé, an altseason is typically triggered by a combination of strong retail presence and liquidity, a risk-on market environment, and favorable macroeconomic conditions such as the absence of quantitative tightening (QT) and the implementation of interest rate cuts (source: Cas Abbé on Twitter, May 3, 2025). These factors create an environment where altcoins can outperform, offering traders opportunities for higher returns. Understanding these triggers helps crypto traders position themselves ahead of major altcoin rallies and optimize their trading strategies during periods of heightened liquidity and risk appetite.

According to Cas Abbé, the BTC dominance chart is showing a clear bearish divergence on the weekly timeframe. The February wick is considered the likely top, indicating potential for a drawdown. With quantitative tightening (QT) expected to slow down next week, Cas Abbé anticipates a decrease in BTC dominance, suggesting a bullish outlook for alternative cryptocurrencies (alts).

According to Cas Abbé, the DXY index is increasing following the recent FOMC meeting. This rise is attributed to increasing bond yields as market participants anticipate higher inflation driven by tariffs. Cas Abbé suggests that the market may be overestimating the impact of short-term rising yields while underestimating potential rate cuts and a slowdown in quantitative tightening (QT).

According to Crypto Rover, the global money supply has reached a new all-time high, and the Federal Reserve is easing off its quantitative tightening policies. This scenario is contributing to the rapid weakening of the U.S. dollar, which could potentially create a bullish sentiment in cryptocurrency markets as investors seek alternatives to USD-denominated assets.

According to Crypto Rover, the recent all-time high in global money supply, combined with the Federal Reserve's decision to slow down quantitative tightening (QT), and the rapidly weakening U.S. dollar, creates a favorable macroeconomic environment that may lead to a significant rally in Bitcoin prices. Traders should consider these factors when making investment decisions, as the potential increase in Bitcoin demand could influence market movements. Source: Crypto Rover.

According to Crypto Rover, the recent observation of a Bitcoin bullish cross, combined with the slowing pace of Quantitative Tightening (QT), suggests a potential significant upward movement in Bitcoin's price. Crypto Rover emphasizes that the reduction in QT, which is a monetary policy tool used to decrease the amount of liquidity in the economy, could lead to increased investment in Bitcoin. Traders are advised to monitor the QT developments closely as they might impact Bitcoin's market trends.

According to AltcoinGordon, Bitmex co-founder Arthur Hayes has stated that quantitative tightening (QT) is essentially over as of April 1. Hayes suggests that market participants should now focus on the potential for a Supplementary Leverage Ratio (SLR) exemption or a restart of quantitative easing (QE), indicating possible bullish momentum for the markets. This shift could influence trading strategies, as traders might anticipate market responses to these potential monetary policy changes.

According to Crypto Rover (@rovercrc), the recent announcement that Quantitative Tightening (QT) will end this year signals a potential explosive growth phase for Bitcoin. This assertion is based on the belief that ending QT may lead to increased liquidity in the market, which could drive up Bitcoin prices. However, this statement should be treated with caution as it lacks corroborating evidence from other financial analysts or institutions.

According to Crypto Rover, the FED has confirmed a gradual return to Quantitative Easing (QE), which is expected to significantly slow down Quantitative Tightening (QT). This policy shift is anticipated to create a bullish environment for Bitcoin, potentially leading to its best trading months. Traders might consider positioning themselves to capitalize on the expected increase in Bitcoin's price and trading volume as liquidity in the financial markets improves. Source: Crypto Rover via Twitter.

According to Charles Edwards (@caprioleio), the Federal Reserve has announced a significant reduction in its balance sheet Quantitative Tightening (QT) within the next 10 days, which is expected to substantially increase US liquidity. Additionally, it is broadly anticipated that the QT and balance sheet offloading will cease by 2025, setting the stage for potential market impacts.

According to Crypto Rover, Fed Chair Powell has confirmed that Quantitative Tightening (QT) has been reduced by half, with plans for a gradual return to Quantitative Easing (QE) levels. This move is expected to significantly increase market liquidity, which is considered massively bullish for the markets.

According to Michaël van de Poppe (@CryptoMichNL), the conclusion of Quantitative Tightening (QT) and increased political support for cryptocurrency, notably from figures like Trump, are clear indicators of an impending bull run in the altcoin market. This analysis suggests a favorable trading environment for altcoins in the near future.

According to Crypto Rover (@rovercrc), Quantitative Tightening (QT) is slowing down, indicating a potential shift in monetary policy that could affect liquidity in the cryptocurrency markets. Rover also suggests that the bull market is not over yet, hinting at continued upward momentum for major cryptocurrencies. Furthermore, an altcoin season is on the horizon, which could see increased interest and investment in alternative cryptocurrencies beyond Bitcoin and Ethereum.

According to Crypto Rover, the Federal Reserve has officially announced a slowdown in Quantitative Tightening (QT) starting from April 1st. This move could potentially lead to increased liquidity in the markets, possibly affecting cryptocurrency prices positively.

According to Crypto Rover (@rovercrc), the Federal Reserve has officially announced that Quantitative Tightening (QT) will end on April 1st. This development could have significant implications for the cryptocurrency markets, potentially leading to increased liquidity and a bullish trend.

According to Crypto Rover, the dollar index is experiencing a decline, inflation rates are cooling, and quantitative tightening (QT) is coming to an end, leading to a surge in global liquidity. Concurrently, gold has reached all-time highs, and there's a growing interest in Bitcoin from the U.S., suggesting a shift in investment preferences towards alternative assets amidst changing economic indicators.

According to Michaël van de Poppe (@CryptoMichNL), monitoring the FED's intentions in the coming months is crucial for cryptocurrency traders. While a rate cut is not expected, any indication of ending Quantitative Tightening (QT) or initiating Quantitative Easing (QE) or rate cuts within the next 2-3 months could lead to significant movements in Bitcoin and Altcoins. The current state of the Dollar Index ($DXY) is also a factor to consider.