Last night, the Fed dropped a bombshell—officially announcing the end of quantitative tightening (QT). Powell’s line, “the money that should stay will stay,” instantly ignited the market. Bitcoin bounced like a spring, surging 7% and racing from $92,000 all the way up. Those bears shouting “keep dropping” just the day before? They’re probably smashing their keyboards now.

Let’s break down what this policy shift really means. QT is basically the Fed’s “money-draining magic”—pulling $95 billion out from the market every month, draining $2.42 trillion over more than two years. But now the Fed changed its tune: starting December 1, 2025, the proceeds from maturing bonds will no longer be withdrawn, but will all be used to buy short-term Treasury bills.

That’s a bold move. It’s like shutting off the drain pump, and even opening a small faucet. The reason is simple—banks’ reserves are running low, and money market rates have started to spike. If they don’t hit the brakes now, the entire financial system could face a liquidity crunch. But Powell made it clear: this is just a “stop the bleeding” move, not the old quantitative easing (QE). Don’t expect a flood of liquidity overnight.

Bitcoin reacted instantly. As soon as the policy was announced, it soared 8% back to $93,000. ETH did even better, jumping 10% and making everyone envious. But what’s really driving this rally? It’s a massive short squeeze. In 24 hours, total liquidations across the network exceeded $1 billion—89% of them were longs getting wiped out, with bears barely getting a chance to breathe.

Why did the market react so fiercely? Because liquidity expectations have completely changed.