As the macro narrative shifts from protectionism to trade optimism, BTC may remain range-bound
QCP Capital recently released a report analyzing the impact of the shift in macro narrative from protectionism to trade optimism on the cryptocurrency market, particularly affecting Bitcoin (BTC) and Ethereum (ETH).
The Shift in Macro Narrative
• Trade Optimism: The agreement between the U.S. and China to temporarily lift some tariffs boosted the U.S. stock market by 3%. Gold prices briefly fell nearly 3%, followed by a partial recovery.
• Cryptocurrency Market Reaction: After an initial drop, BTC and ETH stabilized at approximately $103,000 and $2,400, respectively. BTC's dominance fell below 63%, while altcoins like ETH performed well.
BTC's Market Performance
• Range-Bound Movement: BTC continues to oscillate between its identity as “digital gold” and its role as a risk asset, creating uncertainty in its direction. As the macro narrative shifts from protectionism to trade optimism, BTC may remain range-bound.
• Long-Term Investment Perspective: A long-term investment perspective may support backend options demand, reduce front-end bearish hedging demand, and lead to a steeper volatility curve.
ETH's Market Performance
• Clearer Trend: ETH shows a clearer trend, with liquidity remaining neutral and options skewed towards bearish, indicating that its breakout is not driven by speculation.
• Impact of Technical Upgrades: ETH's breakout at $2,400 coincides with the Pectra upgrade, and the reemergence of long-term option liquidity may suggest that ETH is becoming the next major allocation target in the market.
QCP Capital's analysis indicates that as the macro narrative shifts from protectionism to trade optimism, BTC may remain range-bound, while ETH shows a clearer trend, with technical upgrades and the reemergence of long-term option liquidity potentially signaling its rise as the next major allocation target in the market.