Bitcoin Market in Disarray, But Optimism Prevails With Two Narratives
03 Mai 2023 - 11:00PM
NEWSBTC
The price of Bitcoin has seen a small uptick during today’s trading
session, but the cryptocurrency has been unable to break the
sideways trend. Today, the U.S. Federal Reserve (Fed) announced a
25 basis points (bps) rate hike, but uncertainty in the financial
world remains king. Related Reading: More Dip To Come: Bitcoin
Liquidity On The Move Ahead Of Major Event As of this writing,
Bitcoin (BTC) trades at $28,600 with sideways movement across the
board. Other major cryptocurrencies in the top 10 by market
capitalization have experienced similar price action except for XRP
and Cardano (ADA), which record small losses in the past 24 hours.
Bitcoin Stun By Economic Uncertainty, But Bulls Could Take The
Upper Hand According to a report from the trading desk QCP Capital,
Bitcoin, and the crypto market have been in an 8 week long
confusion phase. As a result, the nascent industry experienced a
decline in its Implied Volatility (IV), leading to the current
sideways price action. Volatility, as measured by the VIX Index, is
crashing to levels last seen during the 2022 bearish phase. This
dynamic might trigger an aggressive move in the coming weeks, but
the direction of such price action is unclear. However, two key
events could support Bitcoin in reclaiming higher levels. Both
scenarios will operate on the macroeconomic board, which keeps
exercising a strong influence over BTC and other financial assets.
First, QCP Capital argues that in the next two months, the U.S.
banking crisis will still be relevant, along with the debt ceiling
in the country. These narratives create the perception that the
fiat system is weak, which could lead to further bank runs. BTC
Bull Run Imminent? Thus, the Fed must continue bailing out
banking institutions and injecting liquidity into the financial
markets. The debt ceiling presents a similar issue; the federal
government might be forced to intervene because the U.S. is
unlikely to default on its debt. As a result, more and more
liquidity could enter financial markets allowing Bitcoin to breathe
and resume its bullish momentum. According to QCP Capital, this
phenomenon is already happening. Due to the banking crisis in the
U.S., the Fed has been forced to intervene, increasing the side of
its balance sheet by almost $500 billion over the past two weeks,
as seen in the chart below. The Fed last injected this much
liquidity during the COVID-19 crisis. At that time, the price of
Bitcoin recorded a massive profit and entered price discovery for
at least 12 months. The trading firm stated the following about
BTC’s potential to see similar profits: The analog compares BTC
price action now (red line) vs. BTC during the 2020 cycle (yellow
line) by lining up the March 2020 and March 2022 lows. It shows
that while we are likely in for a period of consolidation here, the
underlying trend ahead is still strongly to the upside. Related
Reading: Polygon (MATIC) Price Shows Vigor, Are Bulls Up To
Something? Charts from QCP Capital and Tradingview
Polygon (COIN:MATICUSD)
Historical Stock Chart
Von Sep 2024 bis Okt 2024
Polygon (COIN:MATICUSD)
Historical Stock Chart
Von Okt 2023 bis Okt 2024