Hello Traders 🐺
In this idea, I want to talk about macroeconomics and how QE and QT actually impact the economy and financial markets — and more importantly, how both pro traders and even non-professionals can benefit from understanding these basic concepts in their trading journey and even their everyday life.
So make sure to stick with me until the very end, because if you still don't know about these key metrics, this is going to be extremely helpful — and I promise I’ll keep it simple.
🔄 First... What Are QE and QT Anyway?
It’s simple:
QE (Quantitative Easing) = Pumping money into the system 💸
QT (Quantitative Tightening) = Sucking money out of the system 💀
That’s it.
The Fed either injects liquidity — or pulls it back.
And that liquidity is the real fuel of the market —
Not your RSI, not your fib levels, not your favorite influencer's altcoin pick.
🟩 What Is QE?
When the Fed wants to support the economy (like during a crash or recession), it prints money and buys government bonds, mortgage-backed securities, and more.
This increases liquidity → makes borrowing easier → and drives people toward risky assets like stocks and crypto.
✅ Benefits of QE:
Boosts markets (stocks, crypto, real estate — all of it)
Supports employment and economic growth
Weakens the dollar → makes exports stronger
❌ Downsides of QE:
Can lead to inflation or even hyperinflation if overused
Creates asset bubbles (aka pumps with no real fundamentals)
Weakens long-term purchasing power
In short:
QE = Bullish AF for markets — but dangerous if left unchecked.
🟥 What Is QT?
QT is the opposite.
When the economy overheats or inflation gets out of control, the Fed stops printing — and even starts removing liquidity from the system.
They let bonds expire or sell them off, reducing the amount of money circulating.
✅ Benefits of QT:
Helps bring inflation down
Cools off overheated markets
Restores balance after aggressive QE periods
❌ Downsides of QT:
Slows down the economy
Crashes risk assets (like BTC, tech stocks, etc.)
Can trigger a recession if done too fast or too long
QT = Bearish pressure for almost every chart you trade.
💡 Now that you understand QT and QE, let's talk about how we can use this in our trading.
To help you visualize it better, I’ve marked the QT and QE periods on the chart.
And as you’ll see, there’s a perfect correlation between Fed policy decisions and the BTC chart.
It almost looks like their policies decide exactly where and even when the tops and bottoms happen!
Let me explain it step by step — because while it might sound complicated, it’s actually very easy to understand:
📉 Example: The QT Period from 2017 to 2019
From October 2017 to September 2019, the Fed was in full QT mode — and we had three major phases in the market.
Phase 1:
When the Fed first announced QT, BTC was around a red monthly resistance line after a huge parabolic run-up.
Right after the announcement, BTC entered a sharp correction — all the way down to the monthly support.
(Shown with a red ellipse on the chart)
Phase 2:
BTC started to prepare for its next move — it accumulated below a bullish structure and slowly positioned itself for the next wave.
📉📈 Phase 3: The Big Corona Dump + QE Restart
Then came the third and most important phase of QT in the BTC chart:
The COVID crash — a sudden, brutal dump across all markets.
Sound familiar? Yeh, same pattern…
Immediately after the crash, the Fed announced QE and started pumping liquidity again → and we saw that huge parabolic run everyone remembers.
🔁 Now Here’s the Plot Twist... We’re Repeating the Same Pattern
Let’s break it down:
A huge crash after QT announcement (phase 1)
Market accumulation below a bullish structure (phase 2)
One final shakeout — just like the COVID dump — which I personally call Black Monday 2025 👀
And now… the Fed has hinted that they're ready to step in to stabilize the markets if needed ( phase three )
Guess what? Another round of QE could be coming...
In this idea, I tried to explain how QE and QT work — and show you the hidden forces behind every bull and bear cycle.
If you enjoyed this, make sure to follow and stay tuned for more.
And as always, never forget our rule:
🐺 Discipline is rarely enjoyable, but almost always profitable 🐺
🐺 KIU_COIN 🐺
In this idea, I want to talk about macroeconomics and how QE and QT actually impact the economy and financial markets — and more importantly, how both pro traders and even non-professionals can benefit from understanding these basic concepts in their trading journey and even their everyday life.
So make sure to stick with me until the very end, because if you still don't know about these key metrics, this is going to be extremely helpful — and I promise I’ll keep it simple.
🔄 First... What Are QE and QT Anyway?
It’s simple:
QE (Quantitative Easing) = Pumping money into the system 💸
QT (Quantitative Tightening) = Sucking money out of the system 💀
That’s it.
The Fed either injects liquidity — or pulls it back.
And that liquidity is the real fuel of the market —
Not your RSI, not your fib levels, not your favorite influencer's altcoin pick.
🟩 What Is QE?
When the Fed wants to support the economy (like during a crash or recession), it prints money and buys government bonds, mortgage-backed securities, and more.
This increases liquidity → makes borrowing easier → and drives people toward risky assets like stocks and crypto.
✅ Benefits of QE:
Boosts markets (stocks, crypto, real estate — all of it)
Supports employment and economic growth
Weakens the dollar → makes exports stronger
❌ Downsides of QE:
Can lead to inflation or even hyperinflation if overused
Creates asset bubbles (aka pumps with no real fundamentals)
Weakens long-term purchasing power
In short:
QE = Bullish AF for markets — but dangerous if left unchecked.
🟥 What Is QT?
QT is the opposite.
When the economy overheats or inflation gets out of control, the Fed stops printing — and even starts removing liquidity from the system.
They let bonds expire or sell them off, reducing the amount of money circulating.
✅ Benefits of QT:
Helps bring inflation down
Cools off overheated markets
Restores balance after aggressive QE periods
❌ Downsides of QT:
Slows down the economy
Crashes risk assets (like BTC, tech stocks, etc.)
Can trigger a recession if done too fast or too long
QT = Bearish pressure for almost every chart you trade.
💡 Now that you understand QT and QE, let's talk about how we can use this in our trading.
To help you visualize it better, I’ve marked the QT and QE periods on the chart.
And as you’ll see, there’s a perfect correlation between Fed policy decisions and the BTC chart.
It almost looks like their policies decide exactly where and even when the tops and bottoms happen!
Let me explain it step by step — because while it might sound complicated, it’s actually very easy to understand:
📉 Example: The QT Period from 2017 to 2019
From October 2017 to September 2019, the Fed was in full QT mode — and we had three major phases in the market.
Phase 1:
When the Fed first announced QT, BTC was around a red monthly resistance line after a huge parabolic run-up.
Right after the announcement, BTC entered a sharp correction — all the way down to the monthly support.
(Shown with a red ellipse on the chart)
Phase 2:
BTC started to prepare for its next move — it accumulated below a bullish structure and slowly positioned itself for the next wave.
📉📈 Phase 3: The Big Corona Dump + QE Restart
Then came the third and most important phase of QT in the BTC chart:
The COVID crash — a sudden, brutal dump across all markets.
Sound familiar? Yeh, same pattern…
Immediately after the crash, the Fed announced QE and started pumping liquidity again → and we saw that huge parabolic run everyone remembers.
🔁 Now Here’s the Plot Twist... We’re Repeating the Same Pattern
Let’s break it down:
A huge crash after QT announcement (phase 1)
Market accumulation below a bullish structure (phase 2)
One final shakeout — just like the COVID dump — which I personally call Black Monday 2025 👀
And now… the Fed has hinted that they're ready to step in to stabilize the markets if needed ( phase three )
Guess what? Another round of QE could be coming...
In this idea, I tried to explain how QE and QT work — and show you the hidden forces behind every bull and bear cycle.
If you enjoyed this, make sure to follow and stay tuned for more.
And as always, never forget our rule:
🐺 Discipline is rarely enjoyable, but almost always profitable 🐺
🐺 KIU_COIN 🐺
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.