According to @godbole17, crypto’s intense fixation on USD liquidity and the Federal Reserve underscores the need to base trade setups on macro liquidity signals rather than narratives, source: @godbole17 on X, Nov 20, 2025. Traders can operationalize this by tracking net liquidity proxies including the Federal Reserve balance sheet (H.4.1), the Treasury General Account (TGA), and the Overnight Reverse Repo Facility (ON RRP), which together reflect dollar availability to markets, source: Board of Governors of the Federal Reserve System H.4.1; U.S. Department of the Treasury Daily Treasury Statement; Federal Reserve Bank of New York Open Market Operations data. Policy expectations that drive risk appetite can be monitored via fed funds futures and CME FedWatch to gauge the market-implied path of rates, supporting timing for crypto entries and hedges, source: CME Group Fed Funds Futures; CME FedWatch Tool. Augment macro reads with crypto-native liquidity gauges such as stablecoin net issuance, perpetual futures funding rates, and open interest to assess directional pressure and potential liquidation risk, source: Coin Metrics network data; Glassnode Insights; Deribit and Binance derivatives market data. For trade management, align position sizing and leverage with changes in these liquidity indicators around FOMC communications and weekly balance-sheet updates to reduce volatility shocks, source: Federal Reserve Board FOMC calendar; Board of Governors of the Federal Reserve System H.4.1 release schedule.

According to Crypto Rover, a return of quantitative easing could trigger an outsized rally in altcoins, stating that once QE returns, altcoins will go ballistic. Source: Crypto Rover on X https://twitter.com/cryptorover/status/1987248005100290050. For confirmation, traders should watch for renewed asset purchases or balance sheet expansion in the Federal Reserve H.4.1 release and FOMC communications. Source: Board of Governors of the Federal Reserve System H.4.1 statistical release and FOMC statements. Liquidity proxies to track include M2 money stock acceleration and central bank balance sheet growth alongside crypto market breadth and dominance shifts. Source: Federal Reserve Economic Data for M2 and Board of Governors balance sheet data; CoinGecko global crypto market data. Historically, the 2020-2021 QE phase coincided with strong crypto performance, underscoring altcoins sensitivity to liquidity while not guaranteeing future results. Source: Board of Governors balance sheet series and CoinGecko historical price data. Until an official QE program is announced by a major central bank, the thesis remains conditional rather than a confirmed trading signal. Source: Board of Governors of the Federal Reserve System policy communications.

According to the source, the Federal Reserve injected 29.4 billion dollars into the banking system to ease liquidity concerns, described as the largest add since 2020 and not quantitative easing, and the post notes this supports BTC, source: the source. The Fed can add reserves via repurchase operations and the Standing Repo Facility, which temporarily increase reserves without expanding the balance sheet through asset purchases like QE, source: Federal Reserve SRF and open market operations documentation. Bitcoin has behaved like a high beta risk asset and has shown rising correlation with equities during liquidity cycles, which makes additional dollar liquidity a potential short term tailwind for BTC, source: International Monetary Fund analysis on crypto equity co movement in 2022. Traders should monitor the Federal Reserve H.4.1 weekly release for changes in repos, the Treasury General Account, and the Overnight Reverse Repo Facility because these components drive reserve balances that influence risk sentiment across crypto, source: Federal Reserve H.4.1 Factors Affecting Reserve Balances. If reserve additions persist while RRP usage declines, the setup is near term supportive for BTC, whereas a rebuild of the Treasury General Account or higher front end policy rates would tighten liquidity and weigh on crypto beta, source: Federal Reserve H.4.1 and Federal Reserve FOMC policy communications.

According to the source, Bitcoin traders are monitoring potential shifts in the Federal Reserve balance sheet because the weekly H.4.1 release details total assets and reserve balances that indicate U.S. dollar liquidity conditions relevant for risk assets like BTC, as published by the Federal Reserve Board at https://www.federalreserve.gov/releases/h41.htm. Key liquidity channels include the Overnight Reverse Repo Facility, where changes in outstanding balances reflect shifts between money funds and bank reserves, with daily operation results published by the Federal Reserve Bank of New York at https://www.newyorkfed.org/markets/desk-operations/reverse-repo. Flows in the Treasury General Account at the Fed can drain or add reserves to the banking system, and traders track the TGA via the U.S. Treasury’s Daily Treasury Statement at https://fiscaldata.treasury.gov/dts.