A widely followed crypto analyst is predicting higher prices for crypto assets as he expects the Federal Reserve to end its anti-inflation monetary policies.

In a new thread, the pseudonymous crypto analyst Pentoshi tells his 861,300 followers on the social media platform X that we are close to seeing the end of quantitative tightening (QT), which are policies that reduce the Fed’s balance sheet and lowers the supply of money in circulation.

The trader cites data from the decentralized prediction platform Polymarket, which shows that 100% of users believe that the Fed will end QT by May of this year.

The cessation of QT is typically seen as bullish for risk assets like Bitcoin (BTC) and altcoins as the move signals the end of tight monetary conditions.

However, Pentoshi warns investors to be “cautiously optimistic” as both the S&P 500 and top crypto assets have seen growth over the last few years that appears unsustainable.

“I think we are getting close to [the] end of QT with Polymarket now pricing in odds as a sure thing whereas before they were much lower odds. As previously stated, it does seem Trump would end up forcing it. I don’t think QT automatically means it’s easy mode.

I think that mode is clearly gone overall in the way people think about it (2017/2021). While prices are much lower, I think it’s best to be cautiously optimistic. Many things are down significantly and there hopefully will be some decent mean reversion. Markets in general have rallied hard. And assets were likely a bit overvalued before.

SPX going 25% back to back years was going to have low growth or negative this year as it wasn’t a sustainable pace. BTC went from $16,000 to $108,000, SOL [from] $8 to $300. Cautiously optimistic. [Be] patient for any time capitulation, as often, following big trends, we eventually get longer sideways periods and less volatility as the market finds balance.”

While Pentoshi is flipping tactically bullish on stocks and crypto, he warns investors that any rally will likely be short-lived.

“I think any up currently will be a lower high. People underestimate the time aspect.”

At time of writing, Bitcoin is trading for $83,248.

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Ethereum gas fees have dropped significantly, with the average cost of a transfer now at just $0.41, far below the $15.21 peak seen in the past two years.

According to on-chain analytics firm Santiment, low gas fees often suggest a network that isn’t overly congested, which can be a bullish signal for Ethereum’s (ETH) mid-to-long-term price outlook.

It is easier for new buyers to enter the market when there are lower transaction costs, which usually occur during times of price stagnation or negative sentiment. However, as traders and users scramble to transact, high fees typically signal soaring demand, which frequently results in temporary corrections. 

In another development that could further lower transaction fees, the Ethereum network recently approved a vote to raise its gas limit to more than 30 million. Gas limit refers to the maximum amount of gas, or computational resources, that can be consumed by all transactions in a block

A higher gas limit means the network will be able to process more transactions per block, potentially reducing congestion and lowering fees.. Gas limit has reached 35.9 million in the past 24 hours, according to data from gaslimit.pics.

Ethereum is now trading at roughly $2,674 after falling 2% over the past day. Trading volume has increased by 10% despite the drop, indicating rising investor interest. Ethereum has been consolidating between $2,565 and $2,800 for the last two weeks, but the most recent drop to the lower end of this range suggests that there may be more declines to come.

Over $60 million worth of ETH has moved off of exchanges in the last day, according to Coinglass data, which raises the possibility that investors are accumulating ETH. Because they suggest long-term holding and lessen selling pressure, exchange outflows are frequently interpreted as optimistic indicators.

However, with $121 million in short positions at $2,650 and $90 million in long positions at $2,605, intraday traders are still being cautious. This points to a greater level of short-term bearish sentiment.

The SEC’s ruling on spot Ethereum ETFs with staking integration continues to be the largest possible bullish catalyst for ETH. Some analysts believe the lack of staking yield has limited demand for these ETFs, but approval could drive institutional inflows. As of Feb 18., total cumulative ETH ETF inflows have risen to $3.16 billion, according to data from SoSoValue.

Meanwhile, ETH’s decentralized exchange activity has surged. DefiLlama data shows that Ethereum-based protocols handled $2.62 billion in 24-hour trading volume up from $1.1 billion on Feb. 16. Ethereum is closing in on Solana, which continues to face criticism over recent meme coin rug pulls. 

After a brutal sell-off, Bitcoin and Ethereum are back in action. With Trump pausing tariffs on Canada and Mexico, optimism is creeping back into the market—will the rally last?

The crypto market has staged a strong rebound after a brutal sell-off triggered by the U.S. President Donald Trump’s tariff announcement on Feb. 1. 

Bitcoin (BTC), Ethereum (ETH), and the broader digital asset market saw heavy losses after the U.S. moved to impose tariffs on Canada, Mexico, and China, but a temporary pause on trade restrictions for Canada and Mexico has since sparked renewed optimism.

BTC, which plunged to a low of $91,200 on Feb. 3 following Trump’s tariff declaration, has recovered sharply, trading around $101,000 as of Feb. 4—a 7% gain in the last 24 hours, though still down nearly 2% on a weekly basis. 

ETH, which suffered an even deeper plunge to $2,460, has bounced back more aggressively, rising nearly 10% in the last 24 hours to $2,800, though it remains 12% lower than a week ago.

The broader crypto market has followed suit, with total market capitalization surging 8.5% in the past day to reach $3.43 trillion, according to CoinGecko. 

Investor sentiment has also turned positive, as the Crypto Fear & Greed Index has climbed back to 72—indicating a shift into “greed”—after hitting a fear-driven low of 44 during the crash.

Tariff fears and market jitters

The sell-off began on Feb. 3, when Trump’s order introduced new tariffs, sending shockwaves across financial markets, including crypto. 

China was hit with a 10% tariff, while Canada and Mexico faced steeper 25% duties. The move triggered immediate uncertainty, causing risk assets—including cryptocurrencies—to tumble.

However, within hours, diplomatic efforts were already in motion. 

Canadian Prime Minister Justin Trudeau announced on X that he had spoken with Trump and secured a temporary 30-day pause on the tariffs while both countries worked on a broader border security agreement. 

The deal includes a $1.3 billion security plan, appointing a Fentanyl czar, and reinforcing the U.S.-Canada border. 

Mexico followed a similar path, with President Claudia Sheinbaum confirming that the tariffs would be put on hold for a month as both nations worked toward strengthening their land border agreements.

Despite these temporary resolutions, uncertainty remains. Trump, in a Feb. 3 interview with Bloomberg TV, made it clear that no final agreement had been reached and that tariffs on Mexico could still take effect. 

Meanwhile, China, the only country not included in the pause, is reportedly prepared to negotiate, according to a Feb. 3 Wall Street Journal report.

AI, global markets, and crypto’s volatility

While the latest tariff battle sparked the recent market turbulence, crypto prices were already on shaky ground last week due to another development. 

The release of a new artificial intelligence model by China-based DeepSeek raised concerns about the growing capabilities of non-U.S. AI firms, impacting global tech markets. 

This, combined with the tariff fears, led to heavy liquidations in crypto before the rebound took hold.

Now, as traders react to the latest developments, markets remain on edge. While the pause in tariffs has given crypto some breathing room, the situation remains fluid. A prolonged trade war or additional geopolitical shifts could easily reignite selling pressure.