Fed to Stop Draining Cash From December 1, Setting Stage for Crypto Rally

Source: CoinEdition Original Title: Fed to Stop Draining Cash From December 1, Setting Stage for Crypto Rally Original Link:

The Pivot and Market Setup

Crypto markets are readying for a decisive macro pivot this Sunday, December 1, as the Federal Reserve is scheduled to officially end its Quantitative Tightening (QT) program.

The move, which stops the monthly runoff of Treasury securities, effectively turns off the “liquidity vacuum” that has suppressed risk assets for two years. Analysts argue this policy shift, combined with on-chain accumulation, has aligned altcoins in a market structure nearly identical to the pre-bull setup of late 2019.

Key Observations:

• LINK and ADA have reset to September 2019 valuations against Bitcoin, signaling a potential bottom
• Chainlink reserves added 89,000 tokens, confirming institutional accumulation

The Macro Mechanism: QT vs. PMI

The key is the relationship between QT, liquidity pressure, and the global manufacturing cycle. QT, which drains liquidity from the system by shrinking the Federal Reserve’s balance sheet, is expected to conclude before manufacturing activity (PMI) crosses back above the expansion level of 50.

Every time this combination has appeared in the past, crypto markets have followed with strong upside moves. When PMI expansion begins, risk assets move, with the 2019 liquidity reversal serving as a historical precedent.

LINK: Technical and On-Chain Alignment

Chainlink (LINK) is sitting in almost the identical range it held when QT ended in September 2019. Back then, LINK traded between $1 and $2 and today it sits near $13, yet its on-chain risk score is only 25, far below the 50-60 range seen during the previous cycle.

The Chainlink Reserve, which functions as a long-term accumulation mechanism, added another 89,079 LINK this week, bringing total holdings to 973,752 tokens. This reserve addition signals institutional confidence and long-term positioning.

ADA and XRP: The ‘Structural Reset’

Cardano (ADA): ADA/BTC is now trading in the same zone as it was during the 2019 liquidity shift, with price behavior following a similar path. ADA was worth just four to five cents at that moment and today it trades around forty cents while its risk score remains at 20, exactly where it sat as the previous cycle turned. This has been described as “end-of-bear-market territory,” with current weakness representing a late-cycle reset rather than a massive pullback.

XRP’s Unique Position: During the last QT end, XRP failed to outperform Bitcoin because of its ongoing SEC legal battle. Now, with the regulatory pressure resolved, XRP/BTC is sitting at the same structural level it held in 2019, but without the legal overhang that capped its prior performance.

XRP has spent nearly a year consolidating around the $2.20 range and formed a “powerful technical base” at the exact time macro conditions are turning. Its risk score of 39 is higher than ADA’s and LINK’s, but historically still within the bullish range that allowed XRP to rally from 20 cents to over $3 during the 2017 cycle.

Historical Precedent

When the Federal Reserve ended QT in September 2019, the market saw significant rallies:

• LINK: $2 → $13
• ADA: $0.05 → $0.40
• XRP: $0.29 → $2.00

With similar market structures and on-chain accumulation patterns emerging today, analysts suggest the conditions are aligning for comparable upside moves in the coming months.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Readers are advised to exercise caution before taking any action related to cryptocurrency investments.