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The increase of Bitcoin above $71,000 was merely a response to the announcement of a ceasefire between the U.S. and Iran—however, the risks of further declines in the asset remain, according to analysts at QCP Capital.
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Experts believe that the short-term volatility of the leading cryptocurrency has decreased, yet market participants’ behavior indicates that traders continue to actively hedge against price drops.
According to QCP Capital’s assessment, the primary driver for Bitcoin’s movement in the near future will continue to be liquidity in global markets and the actions of large investors. If caution persists among these investors, the leading crypto asset may enter a consolidation phase or fall below $68,000.
Additional pressure on BTC may arise from profit-taking and heightened sensitivity to economic signals. In particular, any shifts in the monetary policies of major nations could swiftly reintroduce volatility, experts at QCP Capital warn.
Simultaneously, even without a sharp increase, the current price level of Bitcoin establishes a foundation for potential upward movement. Analysts believe that a breakthrough of key resistance levels could provide Bitcoin with a new momentum. However, in the near term, they consider the most likely scenario to be a conservative one, suggesting stabilization around the $70,000 mark.
Previously, Matthew Sigel, head of research at VanEck, stated that in the coming months, it is unlikely that strong catalysts will emerge in the crypto market that could alter Bitcoin’s current dynamics.
