Bitcoin continues to move sideways as the weekend approaches, and with trading volumes dropping on exchanges, the cryptocurrency is signaling potential losses. BTC price gave up the gains from last week, but managed to maintain its current levels as a crucial support.
At the time of writing, Bitcoin (BTC) is trading at $23,000 with sideways movement over the past 24 hours and a loss of 3% over the past week. Binance Coin (BNB) and Polkadot have hardly outperformed the first cryptocurrency by market capitalization as it appears that risk appetite is returning to the crypto market.
at recent days Report, trading firm QCP Capital confirms its stance: The potential for a BTC price rally will remain limited after the bullish response to last week’s macroeconomic events. The company expects Bitcoin and Ethereum to move sideways over the coming weeks with a possible short-term rally.
The latter can be translated into price action based on three bullish macroeconomic factors: the US Federal Reserve (Fed) has hinted at less aggressive monetary policy, inflation may have peaked in the short term as evidenced by lower price of commodities, and potential upside in older markets .
QCP Capital believes that many market participants in conventional finance have taken short positions and are likely to expect further losses in previous earnings seasons. These positions are subject to a “short squeeze,” a sudden move to the upside, which could benefit Bitcoin and the cryptocurrency market. QCP Capital He said:
After the FOMC meeting (FOMC, last Thursday), the immediate market reaction was higher prices and aggressive selling. Bitcoin soared to 24,666 and Ethereum to 1793. In volumes, BTC front-end dropped below 70% (from nearly 90%) and ETH’s handle dropped to 90% (from 125%).
Can Bitcoin and Ethereum Survive Mid-Term Obstacles
Given the potential for upward momentum, the bears could resume their attacks if the Fed becomes more aggressive in its monetary policy. QCP Capital noted that “many” Fed members are at odds with current market expectations.
Market participants were trying to outpace the Fed by pricing future interest rate increases. Hence, why some Fed members might want to take a more hawkish stance and surprise the market with a bigger lift, reduce demand, and possibly have a deeper impact on lowering inflation. QCP Capital said:
We continue to believe that the markets will be trading sideways and will be sensitive to economic data releases. The US CPI next Wednesday will be the next important indicator to watch.
The trading firm believes that the upcoming Ethereum “merger” is the biggest obstacle to a future rally. This event could open the way for the emergence of ETH tokens.
If one of these tokens, ETH based on Proof of Work (PoW), is able to hold a market share of ETH based on Proof of Stake, the token could experience a “significant price disruption akin to a stock split or a private dividend.”