Bitcoin continues to be locked up within a narrow trading range, tentatively below its all-time high, and is beginning to look like the Groundhog Day of an old Hollywood movie.
Bitcoin jumped to $118,640 on Wednesday, then a quick 2.58% fell to $115,700. Top cryptos are currently trading near daytime highs.
“The new high remains a strong possibility in the medium term,” wrote QCP Capital, a trading company based in Singapore. Notes on wednesday. Still, the failure of Bitcoin to a record high above $122,800, seen earlier this month flies in the face of “continuous institutional influx and favorable regulatory development.”
“Caution is needed,” QCP wrote, adding that “price action failed to materially address a series of positive headlines.”
Despite being an active catalyst, it writes that short-term fatigue in the barely water treadmill price could be a sign of a “textbook” of “late cycle behavior.”
Several positive headlines have recently emerged, including the US Securities and Trade Commission approval for Bitcoin and Ethereum ETF in physical redemption on Wednesday.
“The crypto market is at a critical time,” Bitfinex analyst wrote recently Reportadded that excessive leverage from Altcoins can make the broader crypto market “vulnerable to sharp delavage events.”
QCP is vulnerable even in the global market when there is a risk from the “overcrowded positioning” of US dollars and USD/JPY shorts.
“This week’s dollar gathering is very unusual,” says Robin Brooks, a senior fellow at the Brookings Institute’s World Economic Development Program. Tweet Thursday.
“The classic short squeeze that occurs when positioning rings with reality.” He hopes that recent moves will end the “bad story of a lazy dollar.”
Increased value of Dollar Index (DXY) often reduces the expected value of Bitcoin. As the US dollar continues to be strengthened due to short coverage, it will also create an environment where safer alternatives such as T-Bills and bonds will flourish.
Catalyst in the form of president’s working group on digital asset markets may provide clear guidance to the industry after its thoroughness 160 pages of report on wednesday.
But until further advancement, many large players remain Bystander.