Bitcoin briefly fell to $76,700 after the latest inflation data before rebounding towards $78,000. According to QCP Capital, this “restrained” reaction is a sign that the markets have largely absorbed the prospect of a 25 basis point rate increase.
The firm explained that BTC’s technical setup remains constructive at current levels, although conviction still depends on the broader market response to this week’s events.
Two very different bets
Bitcoin is trading above a major support zone between $75,000 and $76,000, while resistance lies between $80,000 and $82,000. Ethereum shows a noticeably different flow picture. Spot BTC ETFs saw $462.7 million in net outflows during the holiday-shortened week. However, Friday’s withdrawal slowed sharply to $13.2 million from Thursday’s $282.7 million.
Ethereum ETFs, meanwhile, saw nearly $197 million in net inflows for the week. Friday’s $216.4 million inflow helped push up the weekly total despite earlier outflows. QCP Capital said the divergence indicated differentiated positioning between the two crypto assets. Ethereum faces resistance between $2,500 and $2,550, while support lies between $2,400 and $2,425 and a secondary support zone lies between $2,300 and $2,350.
Bitcoin’s volatility also remains relatively low. QCP Capital declared that the volatility curve is always ascending while the reversal of delta 25 risk is around minus 3 volatility points. Puts are therefore moderately more expensive than calls, even if the positioning remains well below stressed levels. The firm added that traders remain hedged rather than taking a strong directional position.
Bitcoin’s resilience in the face of technological collapse
Several factors could influence the risk appetite for crypto. For example, oil prices rose following a drone attack that temporarily shut down Saudi Arabia’s East-West pipeline. A prolonged disruption could increase pressure on risk assets due to rising energy costs and tightening financial conditions.
At the same time, artificial intelligence stocks have come under pressure following public debates about slowing AI development over security concerns. QCP Capital said Bitcoin’s relative resilience compared to steeper declines in tech and semiconductor stocks is a positive sign for its “uncorrelated positioning.” But a deeper slowdown in crowded tech exchanges could still spill over into crypto due to a lower overall risk appetite and tighter liquidity.
Crypto markets also have a separate regulatory catalyst in Washington. The Senate’s procedural vote expected Tuesday on the updated CLARITY Act could clarify the respective roles of the SEC and CFTC.
This should strengthen the medium-term case for institutional adoption by reducing regulatory uncertainty, but procedural progress would not guarantee final adoption.
You can find more information on the state of the crypto market and key upcoming events in our video below.
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