Bitcoin, crypto prices throttled by macro headwinds: QCP

by

Prices for cryptocurrencies dipped during the past week, following the publication of the Federal Reserve’s minutes that indicated a more aggressive stance (hawkish) due to escalating worries about inflation.

On January 9th, Bitcoin (BTC) and other cryptocurrencies experienced a dip, continuing a trend over several days. As a result, the overall value of all cryptocurrencies dropped by 4%, bringing the total market cap to approximately $3.37 trillion within a 24-hour period.

A researcher at QCP Capital posted on Telegram that the negative economic trends (macro headwinds) caused cryptocurrency prices to drop following the release of minutes from a Federal Reserve meeting on Wednesday, January 8th. Governor Christopher J. Waller of the Federal Reserve mentioned that any future interest rate reductions would be gradual in order to address rising concerns about inflation.

The Federal Reserve has signaled they might reduce the speed at which they lower interest rates due to an uptick in inflation concerns. Yesterday’s ADP employment report, on the other hand, added some economic complexity, suggesting a deceleration in private sector job growth and wage increases. Interestingly, this contradicts Tuesday’s JOLTS jobs report, which portrayed a robust labor market with more open positions.

QCP Capital on crypto downslide

Following a bounce back to $95,200, Bitcoin dipped below its crucial support point of $92,500. QCP suggested that BTC might stay within the range of $92,000 and $95,000 before the next surge. It’s also possible that Bitcoin could dip to the $90,000 level if the $92,000 support is broken, according to the trading desk.

It’s possible that Bitcoin could encounter selling pressure from the U.S. government, as it was reported that the Department of Justice gave approval for selling $6.5 billion worth of Bitcoin seized from the Silk Road. This decision by the DOJ was made just prior to President Donald Trump’s inauguration, leading some cryptocurrency supporters to question the timing of this announcement. They speculated that Trump had pledged to halt all government sales of Bitcoin and create a national Bitcoin reserve.

Despite the immediate effect of such a sale potentially being minimal due to high demand from institutional titans such as MicroStrategy and exchange-traded funds dealing with Bitcoin on Wall Street, it’s foreseen that trillion-dollar investment manager Fidelity anticipates more countries, companies, and governments worldwide will be purchasing Bitcoin in 2025. This increased buying activity could potentially drive up market values.

Read More

2025-01-09 18:57