‘Higher for longer’: Can Bitcoin survive Fed’s latest $18.5B liquidity injection?
On the nineteenth of February, the crypto market turned cautious. Bitcoin remained practically 46% under its October $126,000 peak, weighing closely on sentiment.
Merchants not anticipated the Federal Reserve to chop rates of interest at its March assembly. On the identical time, liquidity entered the system and assist for the CLARITY Act strengthened.
Macro restraint dominated headlines. Structural assist quietly held beneath. Was this one other breakdown, or a setup for reversal?
Charge lower is off the desk as Fed provides main liquidity
The FOMC minutes ended hopes of a March shift. Goal Charge Possibilities confirmed a 94.1% probability that charges would stay at 350–375 foundation factors.
Supply: CME FedWatch Software
The message bolstered “increased for longer.”
Nonetheless, the Federal Reserve added $18.5 billion by in a single day repos. That marked one of many largest liquidity injections since 2020.
That transfer aligned with a delicate easing in monetary situations. Merchants noticed contradiction as an alternative of readability.
Coverage restraint stayed agency. Liquidity quietly expanded. That pressure unsettled danger markets.
CLARITY odds spike
Regulatory sentiment shifted aggressively. Polymarket odds for the CLARITY Act being signed into regulation surged to 90%.
Supply: Polymarket
Notably, political assist strengthened round formal crypto market construction reform. A signed Act might reshape institutional confidence.
Nonetheless, prediction markets measure perception, not regulation. Subsequently, merchants hesitated to cost certainty.
Quantum fears resurface
Since This autumn 2025, Bitcoin [BTC] underperformed as quantum fears resurfaced.
About 3.5 million BTC, practically 18% of the entire provide, remained misplaced or dormant. Markets feared even partial restoration, particularly from older wallets with uncovered public keys, might shift provide expectations.
Nonetheless, Technique’s CEO Michael Saylor pushed again. He stated,
“The community upgrades, lively cash migrate, misplaced cash keep frozen. Safety goes up. Provide comes down. Bitcoin grows stronger.”
As of the first of February, roughly 8.63 million BTC had been held by retail and different entities, 2.30 million sat on exchanges, and 1.80 million had been held by miners.
Private and non-private corporations managed about 1.42 million, ETFs and funds held round 1.40 million, and governments held a smaller share.
Supply: X
Establishments collected practically as a lot because the dormant estimate since 2020.
In the meantime, 13 to 14 million BTC rotated this cycle with out collapse. Change balances saved declining as Bitcoin defended ascending assist close to $57K.
Supply: TradingView
This needed to maintain robust.
