- QCP Capital paints two contrasting scenarios for Bitcoin over the short- and medium-term.
- It believes sustained institutional demand could reinforce BTC’s climb to a new peak.
- However, the leading digital asset’s price stagnation amid key updates within its ecosystem could also hint at market saturation and eventual reversal to the bearish territory.
QCP Capital recently shared its analysis on the current state of Bitcoin (BTC). The digital asset solutions provider anticipates a further surge in the prime cryptocurrency asset to a new all-time high (ATH) if institutional demand sustains and it does not breach its key support level.
QCP Sees a New Bitcoin ATH Under These Conditions
According to QCP, Bitcoin remains tightly rangebound. Although it struggles to break the $120K resistance cleanly, it shows solid support around the $116K zone. The firm attributes its resiliency to the persistent buying interest for the asset, especially from institutional players.
QCP believes BTC could reach new heights over the medium term if the institutional flows carry out its momentum. Consistent and aggressive accumulation led by Strategy (formerly MicroStrategy) and SharpLink Gaming, which underscores long-term conviction in the premier crypto asset, could continuously fuel bullish sentiment.
Strategy Announces BTC Purchase
Strategy remains the largest publicly traded firm in terms of Bitcoin treasury reserves. After missing the big announcement this Monday, the company went on to disclose its latest BTC acquisition on Tuesday. The latest purchase of 21,021 BTC, amounting to $2.46 billion at an average of $117,256 per BTC, raises its total holdings to 628,791 BTC.
So far, Strategy has already spent $46.08 billion for its Bitcoin treasury program at an average cost of $73,277 per BTC.
Bitcoin’s Momentum Could Cool Down Due to These
QCP, however, warns traders and investors to tread the market cautiously. It explained that Bitcoin’s failure to “respond meaningfully” to the series of positive headlines, such as regulatory developments in key markets like the US and anticipation for the incoming slew of crypto exchange-traded funds (ETFs), may indicate market saturation.
The firm reminded that based on historical data, stagnation amid positive updates spells short-term exhaustion. Without a major catalyst coming its way, the trend may signal the last leg of the bull cycle.
On a macro level, QCP observed possible near-term risks from growing short positions on the US dollar within the foreign exchange markets. Citing a Commodity Futures Trading Commission (CFTC) data, the source noted that the consensus has “extremely” shorted the USD/JPY pair.
The report pointed out that the trading pair is expensive to maintain. Hence, it increases the chance of a short squeeze favoring the dollar. It could result in investors unwinding from risk assets, including crypto.
Furthermore, the incoming announcement of the Federal Reserve after the ongoing Federal Open Market Committee (FOMC) meeting could add to the growing unease in the market.
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