BTC, ETH, XRP Price Prediction as Odds of Fed Ending QT in May Hit 100%

This BTC, ETH, and XRP price prediction looks at what to expect ahead as odds of QT ending in May jumped to 100%.
By crispus
BTC, ETH, XRP Price Prediction as Odds of Fed Ending QT in May Hit

Highlights

  • BTC, ETH, and XRP prices remained on edge as odds of QT ending in May rose to 100%.
  • The Federal Reserve is expected to leave interest rates unchanged this week.
  • BTC, ETH, and XRP have formed bearish patterns pointing to a breakdown in the short term.

The crypto market remained on edge as the fear and greed index stalled at the fear zone of 20 ahead of the FOMC decision. Bitcoin (BTC) dropped below $84,000, while Ethereum (ETH) and Ripple (XRP) were little changed. So, what is the outlook of these coins as the odds that the Fed will end QT in May rose to 100%?

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Crypto Market Slips Despite Odds of Fed Ending QT Rise

BTC, ETH, and XRP prices will be in the focus this week as the FOMC delivers its interest rate decision. This will be a crucial meeting because it comes a week after data showed that US CPI dropped in February, while Donald Trump has embarked on a tariff strategy that risks plunging the US into a recession.

One major change the Fed is expected to implement by May is to end its quantitative tightening or QT. A PolyMarket poll estimates that the Fed will end QT in May. These odds have risen to 100%.

QT is a process where the Fed reduces the size of its balance sheet. As shown below, its assets have dropped from almost $9 trillion in 2022 to $6.7 trillion today. Ending QT, and possibly implementing quantitative easing would be a positive thing for risky assets like crypto and stocks. 

Fed Balance Sheet
Fed Balance Sheet

For this week’s meeting, analysts expect the bank to leave interest rates unchanged at 4.50% as it observes the state of the economy.

BTC Price Technical Analysis

Bitcoin price has failed to move above the crucial resistance level at $85,000, a sign that demand is still weak. It remains below the important support at $89,000, the neckline of the double-top pattern at $108,3000. 

BTC price has also formed a death cross as the 50-day and 200-day Weighted Moving Averages crossed each other. It has also formed a rounded top pattern, pointing to more downside, potentially to the support at $74,035, the highest swing in March last year. A move above $85,000 and $89,000 will invalidate the bearish Bitcoin price forecast.

Bitcoin Price Chart
Bitcoin Price Chart

ETH Price Technical Analysis

Ethereum price has plunged in the past few months. It recently crashed below the key support at $2,115, the lowest swing in August last year. The coin is now forming a bearish pennant pattern, a popular continuation sign. ETH price remains below the 50-day and 200-day moving averages. 

Therefore, the bearish pennant points to more downside, potentially to $1,762, the lowest swing this year. This view will become invalid if it rises above $2,115.

ETH price Chart
ETH price Chart

XRP Price Technical Analysis

The XRP price has bounced back to nearly $2.5 after bottoming at $1.9447 last week. The bottom point was the neckline of the head and shoulders pattern, one of the most bearish signs in the market. 

Ripple has found a strong support at the 50-day moving average, which it needs to cross. It also needs to rebound above the shoulders at $3 to invalidate the H&S pattern. 

XRP Price Chart
XRP Price Chart

A move below the neckline at $1.9447 will point to more downside, potentially to the psychological point at $1.

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Summary

Bitcoin, Ethereum, and Ripple prices will be in focus this week as the Federal Reserve delivers its interest rate decision. While the bank will leave rates unchanged, the market will be keen on the statements on QT. 

The three coins have formed bearish pattens. BTC formed a death cross and a rounded top, while ETH has formed a bearish pennant. XRP has formed a head and shoulders, pointing to further downside.

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Frequently Asked Questions (FAQs)

1. What is the outlook of BTC, ETH, and XRP as QT odds rise?

There are signs that the three coins will have a bearish breakdown in the near term and then bounce back when the QT ends.

2. What is quantitative tightening or QT?

QT is a situation where the Federal Reserve reduces its balance sheet. It has reduced that from over $8 trillion to $6 trillion today.

3. What is the outlook of the XRP price?

XRP price has formed a head and shoulders pattern, pointing to a strong bearish breakdown in the near term.
crispus
Crispus is a seasoned Financial Analyst at CoinGape with over 12 years of experience. He focuses on Bitcoin and other altcoins, covering the intersection of news and analysis. His insights have been featured on renowned platforms such as BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com.
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