QT vs QE: Impact on $BTC Dominance and Altcoin Seasons
The Federal Reserve's monetary policy has a clear correlation with crypto market dynamics:
👉During QT (Quantitative Tightening) - Fed Balance Sheet Reduction:
- Bitcoin dominance increases
- $ETH continues weakness
- No altcoin season
👉During QE (Quantitative Easing) - Fed Balance Sheet Expansion:
- Bitcoin dominance weakens
- Ethereum shows strength
- Altcoin season begins
👉Current Market Expectations:
- Experts anticipate QT will end by May
- QE resumption depends on economic conditions
👉Historical QE Launch Timing:
- November 2008: Global Financial Crisis
- November 2010: Delayed economic recovery requiring stimulus
- September 2012: High unemployment, unstable recovery
- March 2020: COVID shock
The correlation between Fed balance sheet changes and Bitcoin dominance/Ethereum strength appears quite strong. If this pattern holds, the next altcoin season may coincide with the resumption of QE.