Bitcoin, Was $126,000 the Peak? Analyst Says “There Will Be No Bailout”

▲ Bitcoin (BTC)

Bitcoin (BTC) has entered a true test in which it must break through market uncertainty on the strength of its own fundamentals and narrative momentum, without the kind of large-scale monetary stimulus and macroeconomic bailouts seen in the past.

According to crypto media outlet NewsBTC on February 18 (local time), macroeconomic analyst Lyn Alden warned in a recent interview that the dramatic liquidity injections investors are hoping for are unlikely to materialize this time. Alden assessed that any policy shift by the Federal Reserve would likely amount to a gradual form of quantitative easing—akin to a modest expansion of its balance sheet—rather than the explosive money printing that previously shook markets. This suggests that Bitcoin will have to be evaluated based solely on its intrinsic value, without external support.

Alden explained that the Fed is not particularly concerned about stock market declines of 10% to 30%, focusing instead on liquidity in the Treasury market and stability in interbank lending. She pointed out that it is a misjudgment for market participants to assume that the Fed will immediately print money at the slightest drop in asset prices. Her view is based on the assessment that the current financial system is not excessively leveraged to the point of requiring emergency large-scale capital injections.

Federal Reserve Chair Jerome Powell’s mentioned plan for a gradual balance sheet expansion involves a moderate pace, starting with the purchase of approximately $40 billion in short-term Treasuries per month. This falls far short of the trillions of dollars in liquidity that some Bitcoin bulls have anticipated. Alden noted that internal plumbing issues within the financial system do not currently demand shock therapy, predicting that the Fed will disappoint market expectations and maintain a highly conservative stance.

Alden’s assessment of this cycle is blunt. She stated that Bitcoin’s peak of $126,000 during this cycle was lower than she had expected, and that market participation also fell short of expectations. In particular, she observed that current investor sentiment is worse than during the 2022 bear market, with a lack of buying from retail investors and the disappearance of an altcoin season—including the earlier surge in XRP—dampening overall momentum in the digital asset market. XRP is written as XRP in subsequent mentions.

Ultimately, Bitcoin must endure the market’s harsh judgment without the powerful tailwind of a macroeconomic bailout. Alden emphasized that the digital asset market appears to have exhausted its ability to generate new narratives and that investors should abandon vague expectations of liquidity injections. For Bitcoin to break through the current correction and stage a renewed rally, it must prove its fundamental value—its scarcity and growing institutional integration—rather than rely on macroeconomic support.

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