On March 19, Bitcoin regained its value to $85K, linked to a slower pace of QT by the US Federal Reserve.
Impact of QT on Bitcoin's Surge
Analysts associate Bitcoin's rally to $85K with the Fed's slower pace of quantitative tightening (QT). Crypto options trading firm, QCP Capital, views this as an 'indirect interest rate cut.' In their daily market review, QCP notes the Fed's decision to roll back QT starting in April as a catalyst driving BTC above $85K.
What's Next for Bitcoin?
The dovish QT shift was anticipated by some analysts. The focus now is on BTC's next move and whether the relief bounce can sustain. Arthur Hayes, founder of BitMEX, suggested BTC might have reached its lowest point at $77K following the Fed's move. However, he also warned of potential downside risk for stocks.
Technical Indicators and Options Market Analysis
From a price analysis standpoint, BTC reclaimed key moving averages on lower timeframes, indicating a bullish shift. However, pseudonymous crypto trader Income Sharks cautioned that a stronger conviction would be OBV (On Balance Volume) clearing its overhead resistance. If OBV weakens after rejection at the resistance level, BTC’s recovery could be capped. Conversely, if volume increases at current levels, BTC’s recovery could be strengthened. QCP Capital also noted that Options market sentiment has turned positive, but whether this bullish skew is sustained depends on the next few days of trading.
The future of Bitcoin will depend on the continuation of the Fed's policy and market sentiment. The varying dynamics may leave an impact on both financial markets and the cryptocurrency sector.
