The price of Bitcoin rebounded sharply on Tuesday, after U.S. Federal Reserve Chair Jerome Powell hinted that the central bank’s balance sheet reduction program is nearing its end and that interest rate cuts may be on the horizon as the labor market shows signs of weakness.
Following last week’s historic deleveraging event that erased nearly $20 billion from the crypto market, Bitcoin led a mild recovery across digital assets. According to data from TradingView, Bitcoin gained as much as 3% after Powell’s remarks, climbing from last week’s low of $101,755 to around $111,955 at the time of reporting.
Powell stated that the overall market outlook has changed little since the Fed’s September meeting, suggesting that additional rate cuts could soon follow. However, he cautioned that ongoing tariffs have contributed to rising prices in an already strained labor market.
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Speaking at the National Association for Business Economics conference, he revealed that the Fed may soon end its “quantitative tightening” phase, noting that reserves are now “somewhat above the level” consistent with ample liquidity.
Market analysts viewed the comments as a pivotal moment. Vincent Liu, Chief Investment Officer at Taiwan-based Kronos Research, told Cointelegraph that an October rate cut could spark significant inflows into crypto and ETFs. “Expect digital assets to feel the lift as capital seeks efficiency in a softer rate environment,” Liu said.
Echoing similar optimism, BitMEX co-founder Arthur Hayes described the Fed’s signal as a potential buying opportunity, asserting that “quantitative tightening is over.” In his view, the end of QT removes a major liquidity headwind, potentially unleashing fresh capital flows into crypto, especially as global easing (from China and Japan) and U.S. fiscal stimulus under the Trump administration amplify the tailwinds.
Veteran trader Peter Brandt added that Bitcoin could soon reclaim its all-time high of $125,100, though he warned of a possible correction before that happens. “Either a huge shakeout, confirmed by a new ATH within the next week, or a violation of the parabola — which in the past has produced a 75% price decline,” Brandt explained. While he believes the days of 80% drawdowns are behind the market, he cautioned that a drop toward $50,000–$60,000 remains possible.
However, not all analysts have bullish sentiment on Bitcoin. Crypto analyst Captain Faibik warned that last week’s selloff might mark the beginning of a larger correction rather than a temporary dip. He noted that Bitcoin’s weekly chart shows a rising wedge pattern, a formation often signaling a potential reversal. “If the lower support line breaks, the bulls could lose control rapidly, triggering heavy selling pressure,” Faibik cautioned, adding that newer investors might get “trapped” while major players exit.
Despite near-term uncertainty, on-chain data from CryptoQuant indicates that Bitcoin’s long-term outlook remains strong. Whale accumulation has reached record levels, suggesting continued confidence among large investors. Analysts also expect capital to rotate from gold to Bitcoin as gold trades in overbought territory on higher timeframes. With potential quantitative easing and rate cuts ahead, Bitcoin’s macro bullish narrative appears to be strengthening once again.
Future Outlook
While short-term corrections remain possible, Bitcoin’s long-term outlook appears increasingly constructive. The convergence of macro easing, on-chain strength, and institutional interest may set the stage for another major rally, potentially redefining the asset’s role in the post-tightening financial era
