QCP Market Projects New Highs For Bitcoin Amid Liquidity Rotation

Bitcoin inflows recorded in recent weeks have spurred analysts to project wider market gains on the heels of upcoming events. 

Based on recent inflows to the leading cryptocurrency, a new market update from crypto trading firm QCP Capital predicts larger market activity post-halving. According to the analysis, the firm hinted the markets are at the center of a broader liquidity rotation likely to bolster Bitcoin to new highs after the upcoming halving event. 

Bitcoin Liquidity To Usher Inflows

The liquidity rotation can be linked to Bitcoin price trading sideways over the last week with the market posting corrections in cryptocurrencies and decentralized finance (DeFi).

Analysts QCP Capital say the market is still within the bull cycle despite recent liquidations from taking the Bitcoin price to $63,869. Bitcoin which surged to an all-time high of $73,750 last week has plunged 13.3% to present levels. 

Some crypto commentators view a slowdown amid weekly inflows in investment products marking broader liquidity to bolster Bitcoin price. Last month, Mathew Sigel, the head of digital research at VanEck noted the increased liquidity around the United States market with bulls taking advantage of the present opportunity. 

The present market outlook sparked off by liquidity is due to the approval of spot Bitcoin ETFs by the United States Securities and Exchange Commission (SEC) on Jan 10. Last week $2.8 billion was recorded in Bitcoin institutional products. 

QCP Warns Investors of Daily Correction

Despite the bullish forecast, QCP Capital warns of near-term corrections impacting price before the halving suggesting ways to wiggle through the tide. Bitcoin halving is notable for its bullish momentum in the top crypto price as the scarcity aids a wider uptick. 

Historically, the event that takes place every four years has led to price gains spurring traders and miners to double down on their positions. Some miners however transferred their Bitcoin reserves to exchanges as a hedge for improved capacity. 

The upcoming Federal Open Market Committee (FOMC) meeting could cause a swing in the asset’s spot price as macroeconomic indicators play a role in institutional investments. Per the release, a signal of two interest rate cuts instead of three might trigger a bearish movement. 

However, inflation has been sticky, and energy, housing, and supply-side costs have risen in the past few months. This could cause the Fed to hold back on cuts and today’s dot plots might show a change in signal to two cuts instead of three. If  this hawkish surprise happens it would be bearish for BTC spot price.”

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David Pokima