The post How Quantitative Tightening (QT) Impacts the Market appeared on BitcoinEthereumNews.com.

AltcoinsBitcoin In a recent tweet from Benjamin Cowen, a prominent crypto analyst, he shared his thoughts on the future of altcoin and Bitcoin (BTC) pairs. Cowen predicts that altcoins will continue to “bleed” in value relative to Bitcoin, especially as BTC’s dominance increases. This pattern, according to Cowen, is similar to what happened last year when the U.S. Federal Reserve (the Fed) announced it would slow down its Quantitative Tightening (QT) efforts. Understanding Bitcoin’s Dominance Over Altcoins Bitcoin’s dominance, which is the proportion of the total cryptocurrency market capitalization that Bitcoin accounts for, has been a key indicator in market trends. Cowen points out that when the Fed slowed its QT policies, it was followed by a drop in altcoins’ performance relative to Bitcoin. This trend of altcoins underperforming while Bitcoin rises in dominance is something Cowen anticipates will continue. The chart accompanying the tweet shows Bitcoin’s dominance and the corresponding behavior of altcoin pairs. Key points are marked to highlight when the Fed made announcements regarding QT, and the market response is clear: as the Fed adjusted its policies, altcoins saw a significant bleed in value against Bitcoin. The Pattern of BTC Dominance Looking at the historical data shown in the chart, Bitcoin dominance fluctuates with changes in monetary policies like QT. Cowen believes that the slowing of QT in 2025 will continue to cause altcoins to underperform compared to Bitcoin. This could also lead to an increase in Bitcoin’s dominance to 66%, as more capital flows into BTC as the Fed’s actions impact market liquidity. The visual representation of BTC dominance on the chart shows how Bitcoin has gained a larger market share during periods when QT has been slowed or paused. This dominance trend could potentially continue into 2025, further reinforcing Bitcoin’s leadership in the crypto space.…

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Filed under: News - @ April 21, 2025 5:29 pm