- Analysts from analysis company QCP Capital have identified a factor they claim will facilitate recovery in the Bitcoin and general cryptocurrency market.
- The analysts highlighted the potential impact of two US economic policy decisions on market sentiment for risk assets, especially cryptocurrencies like Bitcoin and Ethereum.
- In a report released today, the analysts pointed to FED Chairman Powell’s speech following the interest rate decision as a key factor.
QCP Capital analysts predict a market recovery for Bitcoin and other cryptocurrencies, citing two US economic policy decisions as key influencing factors.
Impact of FED Chairman Powell’s Speech
In his speech, Powell announced a reduction in Quantitative Tightening (QT) from $60 billion per month to $25 billion. According to the analysts, this move is expected to stimulate a sense of risk in the market that could benefit cryptocurrencies.
Significance of the Quarterly Repayment Announcement (QRA)
The analysts also drew attention to the Quarterly Repayment Announcement (QRA). The Treasury stated in the QRA that it will not change issuances for longer terms. According to the analysts, this decision is likely to alleviate fears of an increase in long-term returns.
Effect on the Dollar Rally and Cryptocurrency Market
According to QCP Capital analysts, these policy decisions could help suppress the dollar rally, a development that would be positive for risk assets. The analysts stated, “This will help pull down the dollar rally in a way that will be positive for risk assets, which probably caused Bitcoin to bounce from $56,500 and firmly rise above $58,000, and Ethereum approached $3,000 again.”
Implications for Cryptocurrency Investment
According to the analyst, a strong dollar can generally deter investment in risky assets like Bitcoin by increasing demand for the dollar as investors seek higher returns in bonds and term deposits. Therefore, policies that limit the strength of the dollar could create a more favorable environment for cryptocurrencies.
Conclusion
The recent US economic policy decisions could potentially stimulate a sense of risk in the market, suppress the dollar rally, and create a more favorable environment for cryptocurrencies. This could lead to a market recovery for Bitcoin and other cryptocurrencies. However, investors should always conduct their own research and consider their risk tolerance before making investment decisions.
