Bitcoin (BTC) and Ether (ETH) are set to experience volatility in the coming week, but not because of the “toothless” US regulators, according to a recent analysis by trading firm QCP Capital. The report tells market participants to gear up for macro-fueled price action for BTC and ETH.
The recent SEC laws suits against exchanges Binance and Coinbase have caused dust to settle on the macro stories of the week. However, QCP believes that more upheaval will come in the future, making the macro environment much more unpredictable from next week onward. This trend will likely cause more mudslinging from the Biden administration on crypto, possibly even ramping up into election season next year.
QCP noted that the SEC and Chair Gary Gensler are not going to spark the mass depreciation of prices, even if they continue to go after crypto. This is because BTC/ETH treats the SEC as a toothless adversary, and it has become increasingly clear that the term “security” will not apply to either. The trading firm noted that the SEC will continue filing far-fetched complaints seeking sensational headlines leading to final fat settlements.
The report adds that if serious action is to come, it will be from the US Department of Justice or other branches of the establishment. The days following the exchange lawsuits have seen crypto market sentiment withstand the pressure, with the Crypto Fear & Greed Index remaining rooted at 50/100, which indicates “neutral” territory.
Beyond the SEC, macro data reports scheduled for next week could provide a trigger of their own. The Consumer Price Index print for May is due on the 13th of June, along with a Federal Reserve policy update that will determine the next step for benchmark interest rates.
QCP noted that going into the next week, an action-packed macro week is anticipated, with the US Consumer Price Index, June Federal Open Market Committee, and other major central bank meetings taking place. The analysis also flagged changes to the Treasury General Account, some of which is expected to suck liquidity out of the monetary system, thereby presenting a potential headwind for risk assets across the board.
QCP’s optimistic perspective comes as BTC/USD continues to tread water near crucial price support levels, with the 200-week EMA particularly important. BTC/USD traded at around $26,600 on Bitstamp at the time of writing.
The report also aligns with the views of Arthur Hayes, the former BitMEX CEO, who has been monitoring potential changes to the Treasury General Account since the start of the year. Hayes previously stated that any decrease in liquidity would be a positive factor for Bitcoin and other cryptocurrencies, thereby causing these assets to surge higher.
In conclusion, investors should brace themselves for macro-fueled price action for BTC and ETH in the coming week, with QCP advising them to stay focused on the US Department of Justice and Treasury General Account for potential headwinds. Despite the current market challenges, crypto enthusiasts and investors remain optimistic about the future, as cryptocurrency continues to grow in popularity, adoption, and use cases.
