The U.S. Federal Reserve (Fed) may be pivoting away from quantitative tightening (QT), a move that could inject more liquidity into the market and fuel risk-on assets like BTC and ETH etc. This meant that $400B could be injected into the US economy, boosting market liquidity.
Historically, a sharp uptick in the Repo Facility correlated with a strong BTC uptrend in 2021. So, BTC could expect upside momentum if the trend repeats and the Fed liquidity injection continues. Since mid-September 2024, LTH supply has shrunk from 14.2M to nearly 13.1M in early January 2025. In short, they have sold over 1M BTC coins in three months.
However, the short-term holders have absorbed nearly all the LTH sell-offs. Over the same period, the STH supply soared from 2.5M to 3.8M BTC. The higher timeframe market structure could be flipped bullish if it decisively closed above $110K and key moving averages.
As of now, at the time of writing this article, BTC is trading around $96,700 and has gain 0.11% over the past week and stands at a market capitalization of $1.91 Trillion.