Fed: Limited scope for major cuts in balance sheet – NBC

💡 DMK Insight

The Fed’s balance sheet is a ticking time bomb for crypto and forex traders. With the Federal Reserve’s balance sheet hovering around $6.5 trillion, any significant moves in quantitative tightening (QT) could send shockwaves through the markets. Traders should be wary of how this affects liquidity, especially in assets like Ethereum (ETH) and Cardano (ADA), which are sensitive to broader economic shifts. If the Fed can’t reduce its balance sheet further, it might lead to a stagnation in market growth, impacting risk assets. Look for correlations between ETH and ADA’s price movements and any Fed announcements. On the flip side, if the Fed signals a pause or a more dovish stance, we could see a rally in these cryptocurrencies as liquidity improves. Keep an eye on ETH’s resistance around $2,000 and ADA’s support at $0.25. These levels could be critical in the coming weeks as traders react to macroeconomic indicators and Fed communications.