Bitcoin tumbled below $73,000 in early morning trading hours Wednesday, as central bank decisions from the Federal Reserve on Wednesday and numerous other bank on Thursday looms in the background, per a new note from investment group QCP Capital.
QCP reports that Bitcoin holds its post-shock range but lacks the momentum to surpass recent highs.
Broader cryptocurrency assets remain under pressure. While outperforming other macro-sensitive risk assets in the current environment, spot trading volumes are light and on-chain data shows purchasing activity at the lower end of the price range.
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Macroeconomic indicators are driving market activity during a crucial week for monetary policy, QCP says. The Federal Reserve, European Central Bank, Bank of Japan, and Bank of England are convening for meetings this week.
“Markets have sharply pared easing expectations as higher oil prices complicate the path for rate cuts, even as growth and labour data soften. For crypto, the implication is straightforward: the rates backdrop is becoming less supportive, not more,” QCP says.
In the background looms the conflict between Iran, Israel, and the U.S. Oil prices remain elevated at over $100 per barrel.
Despite the bearish background, Bitcoin is experiencing a shift in its asset classification, QCP says.
Bitcoin “is no longer trading like a pure high-beta risk asset, but it is not yet attracting consistent safe-haven flows either,” the firm notes.