In a Twitter thread on the 27th of January 2023, QCP capital, a full-suite crypto asset trading firm, tweeted about the drastic market changes in Bitcoin, seen from the bearish in the last quarter of 2022.
Drastical Bitcoin Market Changes
This sudden flip from bearish to bullish sentiment is being seen as a microcosm of the larger changes happening in the macro markets and is a clear indication of the volatility and unpredictability of the current market conditions. Initially continuing its downward trend from the previous week, bitcoin recovered into positive territory on Monday. Bitcoin, the biggest cryptocurrency by market capitalization, climbed into a positive environment after falling below $33,000.
As broader stock markets reversed course and ended the day higher, the world’s largest cryptocurrency by market cap was up 5.6% to $37,183.25.The investment company claimed in the tweet that the current options market conditions make it appear as though the recent FTX incident never happened and that the market conditions are significantly different from the bearishness seen in Q4 2022.
image source : QCP capital
According to Hayden Hughes, CEO of social media trading platform Alpha Impact, “markets are overdue for a relief rally.” Bitcoin experienced similar eight straight weeks of losses and reached technically oversold levels, typically only seen at the end of bear markets.
The price of ether has significantly dropped to as low as $2,176.41, the lowest level since July. To $2,444.85, it last increased by 1.1%. The price of ether is currently 49% below its all-time high, which implies that the ETH volatility rate has fallen in general, which makes ETH face a fear of collapse within the market. ETH’s customers expected the prices to remain higher this quarter as investors prepare for higher interest rates and tighter monetary policy from the Federal Reserve; the sharp declines have been correlated with selling seen in riskier assets like technology stocks.
image source : QCP capital
In addition, QCP Capital pointed out that the upcoming CPI, scheduled for release on Valentine’s Day the following month, might break the bulls’ hearts. Currently tracking at a staggering 0.58% M/M, the inflation Now cast model from the Cleveland Fed could officially be 0.6% M/M if the forecast is accurate. The market’s upbeat view of inflation is thrown for a loop by this significant number. The USD and Gold prices, which have been leading and driving crypto prices, have been positively diverging, and QCP Capital has expressed concern about this.