Bitcoin and Ethereum prices climbed above $74,000 and $2,270 on Monday while equities and gold faced downward pressure, a dramatic change up from the recent price pressure across the cryptocurrency market, according to a new market note from investment fund QCP Capital.
QCP labeled Bitcoin and other crypto-assets a “digital safe haven,” as the war in the Middle East threatens to turn into a protracted conflict.
“Rising tensions around Iran appear to be pushing more users on-chain in search of cross-border liquidity and capital mobility. Last week, USDC supply reached a record $81.1B, lifting overall stablecoin supply and signalling fresh liquidity entering crypto amid global uncertainty,” QCP said in its note.
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QCP argues potential passage of the Clarity Act–currently stuck before the U.S. Senate–positive inflows to Bitcoin ETFs, and continued buy pressure from Michael Saylor’s Strategy (NASDAQ: MSTR) act as positive catalysts for Bitcoin. Moreover, Bitcoin has performed well in other recent international conflicts, such as the start of the Ruso-Ukraine War where Bitcoin gained 37% before the FTX collapse of 2022.
Still, QCP says Bitcoin faces an “immediate hurdle” at $74,500, with a pocket of short liquidations sitting right above that level.
QCP indicated that a push above $75,000 could force dealers to hedge and amplify the rally. A price increase above this strike could spark a gamma squeeze as dealers hedge via near-dated calls or spot purchases. QCP expects to gain more clarity over Bitcoin’s potential comeback in the face of numerous price pressures over the next few weeks, with either a dramatic re-entry into the market or a cool-off going into next quarter.