Bitcoin keeps on moving sideways as the weekend approaches and, with less trading volume on exchange platforms, the cryptocurrency hints at potential losses. BTC’s price has surrendered the gains from the past week but has been able to hold to its current levels as critical support.
At the time of writing, Bitcoin (BTC) trades at $23,000 with sideways movement over the past 24 hours and a 3% loss over the past week. The first cryptocurrency by market cap has been severely outperformed by Binance Coin (BNB) and Polkadot as risk appetite seems to return to the crypto market.
In a recent report, trading firm QCP Capital reiterates its position: BTC’s price upside potential will remain capped after a bullish response to last week’s macro-economic events. The firm expects Bitcoin and Ethereum to move sideways during the coming weeks with potential short-lived rallies.
The latter could be translated into price action based on three bullish macro-economic factors: the U.S. Federal Reserve (Fed) has hinted at a less aggressive monetary policy, inflation might have reached its short-term peak as reflected by the drop in the price of commodities, and the potential upside in legacy markets.
QCP Capital believes that many market participants in traditional finances took short positions, potentially expecting more losses in the past earnings seasons. These positions are susceptible to a “short squeeze”, a sudden move to the upside, which could benefit Bitcoin and the crypto market. QCP Capital said:
Post-FOMC (Federal Open Market Committee, last Thursday), the immediate market reaction was a price rally and vol sell-off. BTC rallied to 24,666 high and ETH rallied to 1,793. In vols, BTC frontend dropped to below 70% (from close to 90%) and ETH to 90% handle (from 125%).
Can Bitcoin And Ethereum Break Past Mid-Term Obstacles
As there is potential for bullish momentum, bears could resume their attacks if the Fed turns more aggressive on its monetary policy. QCP Capital noted that there are “many” Fed members in disagreement with current market expectations.
Market participants have been trying to get ahead of the Fed by pricing in their future interest rate hikes. Thus, why some Fed members might want to turn more hawkish and surprise the market with a bigger hike, reduce demand and possibly have a deeper impact on reducing inflation. QCP…
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