In a recent market update, crypto asset trading firm QCP Capital has made a bold prediction, foreseeing Bitcoin’s ascent to a new all-time high post-halving, driven by a broader liquidity rotation.
The update highlights a peak in Bitcoin ETF inflows on March 12, with a staggering influx of over $1 billion into the market. However, a subsequent decrease in net inflows, coupled with a significant outflow of $326.2 million—the largest seen thus far—precipitated a sharp decline in Bitcoin’s price to $60,770, before it rebounded to surpass $63,000. Notably, Bitcoin’s daily trading volume has dipped by 8%, hinting at a potential slowdown in liquidation.
The firm speculates on whether these movements signify a trend towards net daily outflows or simply position adjustments ahead of the Federal Open Market Committee (FOMC) meeting. The Fed’s previous indication of three rate cuts this year has aligned market expectations accordingly, as rate cuts typically boost Bitcoin prices by diminishing the appeal of yield-bearing assets, thus making non-yielding assets like Bitcoin more attractive to investors.
However, persistent inflation and escalating costs across various sectors may prompt a reevaluation, potentially reducing the forecast to two cuts. QCP Capital suggests that such an outcome could have a negative impact on Bitcoin’s spot price.
Nevertheless, amidst these uncertainties, the firm maintains an optimistic outlook on Bitcoin’s trajectory. They point to a “broad liquidity rotation” phenomenon that could propel the cryptocurrency to new highs post-halving. While acknowledging the possibility of a severe short-term correction due to existing leverage, QCP Capital advises traders to adopt strategies such as the Enhanced Sharkfin, which offers principal protection and significant upside potential, to navigate the volatility effectively. According to QCP, this approach strikes an optimal balance, minimizing downside risk while maximizing profit potential during an upswing in Bitcoin’s value.
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