According to a recent analysis by QCP Capital, the cryptocurrency market is currently grappling with a new macroeconomic risk premium.
The significant decline of the US dollar has contributed to an increase in the values of Bitcoin, gold, and silver; however, it is important to note that Bitcoin’s rally has not proven to be stable.
The report from QCP Capital highlighted that during the early hours of trading in Asia, there was considerable selling pressure on the US dollar. This prompted investors to seek alternative stores of value. As a result of this dollar depreciation, both gold and silver continued their upward trajectory. In contrast, Bitcoin struggled to maintain its position above $92,000 and saw a pullback ahead of the European market opening.
This movement was reportedly influenced by remarks made by Federal Reserve Chairman Jerome Powell. His comments regarding legal inquiries from the US Justice Department towards the Fed were interpreted as potential retaliation against its monetary policy stance. QCP noted that while immediate economic impacts might be limited, any questioning of central bank independence could significantly undermine institutional credibility.
Historically speaking, such perceptions have often led investors toward alternative assets for value preservation; hence why gold and silver are sustaining their positive trends. Although Bitcoin initially benefited from this buying surge, it faced resistance at $92,000 and subsequently declined—a behavior pattern described by QCP as reminiscent of typical fourth-quarter trends.
Furthermore, activity within derivative markets suggests that bullish sentiments have been deferred for now. Last week saw some reduction in long-term call option positions as investors opted for contracts with later expiration dates coupled with higher strike prices. Additionally, persistent selling pressure during US trading hours along with uncertainties about market supply dynamics have restricted any upward momentum for Bitcoin.
In their evaluation process, QCP Capital pointed out that amid rising macroeconomic volatility levels; crypto assets are finding it increasingly challenging to compete favorably against precious metals and resilient equity markets.
Looking ahead over the next few days will see markets closely monitoring key events such as US CPI data set for January 13 (Tuesday) and a Supreme Court ruling on tariffs scheduled for January 14 (Wednesday). According to insights from QCP Capital these two occurrences are likely pivotal in shaping investor risk appetite and asset allocation strategies moving forward.
*This content does not constitute investment advice.