BTC Stalls at $91.7K | Fed's Balance Sheet Expansion Ignored
Bitcoin (BTC) is currently bumping against major resistance at $91,750. Surprisingly, many in the mainstream media and even Federal Reserve followers have overlooked a significant shift: the Fed has resumed expanding its balance sheet, introducing new liquidity into the market.
The Fed's Quiet Moves
Recent analysis reveals that the Federal Reserve began injecting funds into the system weeks ago, evidenced by a sharp decline in reverse repo usage and drawdowns from the Treasury General Account (TGA). This action might not be the high-profile โQT is overโ statement that had been anticipated, but it suggests a de facto QE lite scenario.
This escalation in liquidity implies a favorable environment for Bitcoin and other risk assets, raising questions about why the market hasn't reacted to this change yet. As many commenters on user boards have noted:
"This is the stealth QE nobody priced in yet."
Market Reactions and Sentiment
Users express mixed sentiments regarding these developments. Some are bullish:
"Bear trapโthe bull run starts now!"
"Buckle upโ$100K BTC by Santa rally? Easy if we break 92K clean."
Conversely, others look skeptical, recalling past cycles of disappointment. A few comments reflect this cautious attitude:
"I lean a tad optimistic, but I trust nothing and nobody right now."
"We might witness a massive QE that we haven't seen even during COVID."
This divergence in user sentiment indicates an underlying tension in the community.
Key Takeaways
โณ BTC faces strong resistance at $91,750.
โฝ Fedโs liquidity injections might set the stage for Bitcoin's next jump.
โป "The balance sheetโs about to swell past COVID peaks at $20B+/month," a top-voted comment stated, highlighting the urgency of the situation.
The market appears unprepared for the potential breakout as liquidity changes the landscape. Will Bitcoin power through this barrier or remain stalled? As developments unfold, traders and investors will closely monitor both BTC's price action and the Fed's next moves.
The Road Ahead for Bitcoin Solidifies
Thereโs a strong chance Bitcoin may break through its current resistance at $91,750 if the Federal Reserve continues its balance sheet expansion. Experts estimate that if liquidity increases significantly, BTC could rally toward $100K by year-end. Given past patterns of how Bitcoin has behaved in response to major liquidity shifts, the probability of a breakout within the next month sits around 65%. If BTC holds the line above $92K, bullish sentiment might drive it even higher, especially as holiday trading kicks in.
Lessons from the Housing Boom
Looking back at the early 2000s housing boom during low-interest rates offers a fresh perspective. Just as mortgage securities flourished amid easy creditโresulting in soaring home pricesโitโs possible Bitcoin could experience a similar surge from the Fedโs current liquidity strategy. Investors at the time also grappled with doubt yet witnessed a rapid drive upward until reality set in. This parallel highlights that, while optimism fuels market speculation, caution should always coexist with enthusiasm.