Cryptocurrency analysis firm QCP Capital has released a comprehensive assessment of the market after Bitcoin fell below the key threshold of $90,000.
The firm claimed that the main reasons for the decline were rapid changes in macro expectations and continued ETF outflows on the institutional side.
Bitcoin has been under increasing selling pressure throughout this week due to declining liquidity. QCP Capital noted that tight liquidity has increased price volatility and made Bitcoin more sensitive to macroeconomic trends than ever before.
According to the analysis, the biggest shock to the market was the sudden disappearance of expectations for a rate cut, which had seemed certain in December. Expectations have plummeted from nearly 100% to 50%, putting huge pressure on investment products like Bitcoin, which are considered “time-sensitive assets.”
QCP noted that the stock price is more resilient thanks to its strong balance sheet. Record capital spending and strong profits, especially by major tech companies specializing in AI, are supporting the stock market.
The release of official data as the US government reopens has given the market a new direction. Labor market data and the Conference Board’s LEI index are in the spotlight this week. QCP Capital says the LEI, which includes the latest job posting data, will shed light on the Fed’s policy direction through 2026.
Fed Chairman Jerome Powell’s statement that a rate cut in December is not guaranteed is also adding to the uncertainty.
QCP Capital assesses that the overall economic outlook indicates a late-cycle situation rather than a recession. Strong household balance sheets and high business investment continue to support the economy, but fiscal constraints and labor inequality remain risks.
The firm believes this week’s data will determine whether Bitcoin’s current decline is a temporary decline in positions or the beginning of a broader risk-off period.
*This is not investment advice.
