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The crypto economy experienced a dramatic $1.5 billion in long liquidations, resulting in a 3,000-point drop before finding support at the critical 95,000 level, according to analysts at QCP Capital.
Institutional Demand Rises: QCP Questions If Market Can Stay on the Sidelines
The leading cryptocurrency, bitcoin (BTC), has since recovered, consolidating in the 97,000 to 98,000 range. This volatility has left altcoins trailing in performance, QCP Capital analysts explained in a note. Despite the turbulence, QCP noted strong momentum in the market for spot exchange-traded funds (ETFs).
Bitcoin and ethereum (ETH) spot ETFs have recorded eight and 11 consecutive days of net positive inflows, respectively. QCP researchers explained that these inflows reflect sustained investor interest, contributing to a more stable trading environment.
QCP also mentioned Riot Platforms adopting a strategy similar to Microstrategy’s, issuing $500 million in convertible notes to acquire bitcoin. The notes, issued with a 0% coupon, have garnered strong demand, the analyst said. QCP further questions whether the market can afford to ignore such significant institutional interest.
Meanwhile, QCP’s analysis also notes that Microsoft shareholders are set to vote on a proposal to add bitcoin to the company’s balance sheet, a decision that could provide an additional boost to market sentiment if approved, despite opposition from the board.
QCP states that broader macroeconomic conditions have been less volatile, with inflation data pending and relative political stability in France and South Korea. In Asia, markets rallied on the back of China’s stimulus promises. However, QCP observed that BTC and ETH derivatives markets remain skewed toward puts, reflecting caution among investors.
While BTC appears to be stabilizing, QCP emphasized the need for a significant catalyst to drive momentum beyond the 100,000 threshold. Without such a trigger, the market is likely to remain range-bound in the short term.