QCP Capital, a trading firm specializing in crypto assets, is forecasting that Bitcoin will reach a record high following the recent halving event, driven by a broader shift in liquidity. The company’s most recent market report reveals that Bitcoin ETF inflows peaked on March 12, surpassing $1 billion. However, a subsequent decrease in net inflows and a substantial outflow of $326.2 million, the largest to date, caused Bitcoin’s price to drop sharply to $60,770 before bouncing back to over $63,000.
Today, Bitcoin’s daily trading volume has decreased by 8%, suggesting a potential slowdown in liquidation. QCP Capital is speculating whether these movements signal a shift towards net daily outflows or are simply position adjustments in anticipation of the Federal Open Market Committee (FOMC) meeting. With the Federal Reserve hinting at three rate cuts this year, the market has adjusted its expectations accordingly. Historically, Fed rate cuts have boosted Bitcoin prices by reducing the attractiveness of yield-bearing assets, making non-yielding assets like Bitcoin more appealing to investors.
Concerns about persistent inflation and increasing costs in energy, housing, and supply chains could lead to a reassessment, potentially resulting in a reduction to two rate cuts. QCP Capital warns that such an outcome could have a negative impact on Bitcoin’s spot price. Despite these uncertainties, the firm remains positive about Bitcoin’s future trajectory, pointing to a “broad liquidity rotation” that could drive the cryptocurrency to new heights after its next halving event. While acknowledging the potential for a significant short-term correction due to existing leverage, QCP Capital advises traders to consider strategies like the Enhanced Sharkfin, which offer principal protection and significant upside potential to navigate market volatility. This approach, according to QCP, strikes the optimal balance between minimizing downside risk and maximizing the opportunity for profit from an increase in Bitcoin’s value.
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