Home > RESEARCH > Bitcoin must leverage $1T central bank liquidity to beat sellers — Research

Bitcoin must leverage $1T central bank liquidity to beat sellers — Research

BTC price action is all but guaranteed to benefit from extra central bank liquidity, but the journey higher is fraught with difficulty, says QCP Capital.

Bitcoin holders need to consider the central banks of China and Japan, as well as the United States, as Bitcoin is battling "great" frictional resistance against the dollar.

This is also the position of online trading platform QCP Capital, which warned in its latest password market research article, "encrypted Circular", that Bitcoin faces risks far beyond Fed meetings.

Bitcoin is "the most intuitive liquidity agent in the world"

Bitcoin, which survived the recent flood of macroeconomic data in the United States, is falling to slightly less than $25000 as both ends lose momentum.

For QCP Capital, there is now reason to believe that the potential risk of jeopardizing price performance will come not only from Fed meetings, but also from China and Japan.

Investors must now deal with issues such as China's consumer price index (CPI) and its US CPI, as well as the policy changes of the Bank of Japan.

"while the value of Bitcoin as an inflation hedge is unclear, it is undeniable that it is the most intuitive liquidity proxy in the world because it is not tied to any central bank or region," the study said.

Bitcoin is particularly sensitive to liquidity around the world, and when central banks inject bitcoin, it means an engine of stimulating growth. This view has long been particularly popular, and others are still concerned about how the "liquidity fanatic" Bitcoin will view the change in central bank liquidity this year.

"while we are concerned about US dollar liquidity-in terms of the Fed's quantitative easing and reserve account balances, we have missed the massive liquidity injected by the Bank of Japan (BOJ) and China (PBoC) over the past three months," the QCP said again.

"the reverse of the consensus is that central banks have already added a net $1 trillion in liquidity since the sales market stopped in October 2022, in which the people's Bank of China and the Bank of Japan are big promoters."

QCP refers to the dichotomy between US policy and China and Japan-quantitative tightening (QT) and quantitative easing (QE). No matter what the Fed does at its meetings, additional liquidity in one place is almost certain to inject risky assets such as data encryption.

"as a result, such a large liquidity injection will undoubtedly become a login password, even though the incumbent US government seems to be doing everything it can to prevent this from happening," the report said. "

In contrast to a net injection of $1 trillion of liquidity, the Fed meeting reduced its balance sheet to its lowest level since September 2021.

"this means that apart from the guidance of US data and Fed meetings at this stage, which is still the highest beta of market movements, everyone must also be aware of the liquidity injections from the Bank of Japan and the people's Bank of Japan," QCP wrote.

"any reversal in the liquidity of the source of these two information will also erase the potential support that Bitcoin has gained in the past month."

Scientific research strictly implements the "two-path" warning.

However, looking forward to the future, when it comes to Bitcoin, liquidity fans face strong friction, and order information shows that merchants are waiting.On the wholeClose to $30,000.

QCP warns that $25000 has already caused enough problems, and acknowledges that rejection to this extent will mean that friction resistance is still manipulated from 2022.

As reported by Cointelegraph, this situation is also highly concerned by REKT Capital, a popular trader and investment analyst.

The adjustment of BTC-- for August 2022 is higher and is forming a recessive double path, with a reaction bottom point of 25300 in May 2022. In this place, we will have 28800-30000 very large friction resistance, which is also the resistance level of the head and shoulders, "the study confirmed.

At the time of writing, Bitcoin was trading at about $23700 against the dollar, close to the bottom of the week, according to Cointelegraph Markets Pro and TradingView statistics.

by wjb news
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Tue, 18 Apr 2023