Bitcoin Sends Mixed Signals At $23,000, Capped Upside Potential?
August 05 2022 - 11:12AM
NEWSBTC
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. Related Reading: TA – Polkadot Price Shows
Strength, Eyes $10 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 Capital said: We continue to think that markets will
trade sideways and will be sensitive to economic data releases. US
CPI next Wednesday will be the next important one to watch. The
trading firm believes that the upcoming Ethereum “Merge” is the
biggest hurdle for future appreciation. This event might open the
path for the emergence of ETH fork tokens. Related Reading: Crypto
Market Trades Sideways As The Inflation Fear Kicks In, What’s
Ahead? If one of these tokens, the ETH based on Proof-of-Work
(PoW), is able to retain market share from the ETH based on
Proof-of-Stake, the token could see a “significant price disruption
akin to a stock split or special dividend”.
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