Fed Liquidity Shift Could Ignite the Next Major Crypto Bull Run

Veteran trader VirtualBacon believes the crypto market is standing on the brink of a massive upswing — and this time, it’s not about the Bitcoin halving or ETF approvals, but about the Federal Reserve. According to him, a silent shift in the Fed’s liquidity policy could trigger a new wave of capital inflows, sending Bitcoin, Ethereum, and altcoins soaring once again.

Fed Nears the End of Tightening — and the Market Feels It After more than 18 months of quantitative tightening (QT) — during which the Fed has reduced its balance sheet by roughly $7 trillion to combat inflation — there are now clear signs that this phase may be nearing its end. Major banks including Goldman Sachs, Bank of America, and Evercore predict QT will end by November or December, setting the stage for a resurgence of market liquidity. “It’s not the halving or the ETFs — it’s the Fed’s liquidity that drives crypto cycles,” VirtualBacon says. According to him, shifts in the central bank’s liquidity are what bring capital back into risk assets — and thus, into crypto.

History Is Clear: When the Fed Prints, Crypto Rallies Every major crypto bull market has coincided with periods of monetary expansion by the Fed: 🔹 2019: As the Fed eased policy, Bitcoin tripled in value within months.

🔹 2020: Pandemic-era money printing sent Bitcoin from $5,000 to $69,000.

🔹 2022: When QT resumed, altcoins crashed. Now, in 2025, the setup looks strikingly similar to the start of a new bullish phase. “Once liquidity reverses, altcoins will explode again — just like before,” VirtualBacon notes.

Liquidity Signals Point to a Turning Tide Economic indicators are flashing familiar patterns. Bank reserves are falling, repo market stress is rising, and the U.S. Treasury recently boosted its cash balance by $800 billion, temporarily draining liquidity from the system. Analysts say this mirrors 2019, when the Fed quietly initiated what was later dubbed “stealth quantitative easing.” The FedWatch Tool now shows a 99.9% chance of a rate cut this month, and an 87.9% chance of another cut in November or December — a clear signal that monetary policy is turning dovish, historically a strong driver for Bitcoin and risk assets.

What It Means for Bitcoin and Altcoins VirtualBacon believes Bitcoin hasn’t yet hit its peak. According to his models, the market is still in the mid-cycle stage, where bullish momentum typically builds. With global money supply (M2) already rising and gold leading the charge, he expects Bitcoin to follow soon. If liquidity truly flows back into the system, Ethereum, Solana, XRP, and BNB are likely to be among the first to surge, paving the way for another broad-based crypto rally that could once again rewrite market history.

Conclusion The crypto market may appear calm on the surface, but under the hood, pressure is building. If the Fed truly pivots and ends quantitative tightening, a new wave of liquidity could unleash the next great bull run — with Bitcoin leading and altcoins close behind.

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