QCP Capital says Bitcoin’s struggle to break above $120K signals short-term weakness, warning that a U.S. dollar short squeeze could trigger a wider crypto sell-off.
Key Takeaways
Bitcoin remains range-bound between $116K–$120K, with repeated attempts to break higher failing.
QCP Capital warns of a possible USD short squeeze, which could spark a “risk-off” wave across stocks, emerging markets, and crypto.
Institutional inflows and regulatory progress remain supportive, but short-term momentum is stalling despite bullish headlines.
Bitcoin’s Narrow Trading Range Raises Questions
QCP Capital noted in its latest market update that Bitcoin (BTC) is stuck in a “narrow range”, struggling to break decisively above the $120,000 resistance level.
Meanwhile, buying support near $116,000 has held firm, preventing deeper declines. But the lack of reaction to positive headlines — including U.S. pro-crypto regulatory wins and ETF developments — suggests short-term weakness in market sentiment.
“Historically, when the market has frequent bullish news but stagnant prices, it often indicates short-term weakness,” QCP warned.
Dollar Short Squeeze Could Hit Risk Assets
QCP highlighted a structural risk emerging outside crypto:
CFTC data shows traders are heavily short on USD/JPY, reflecting expectations for a weaker dollar.
QCP cautions that if a USD short squeeze unfolds, it could trigger risk-off flows across equities, emerging markets, and crypto assets.
Medium-Term Outlook Still Bullish
Despite near-term caution, QCP emphasized that institutional inflows and regulatory momentum remain constructive for Bitcoin and Ethereum in the medium term.
However, Ethereum’s rally has also slowed as it approaches the psychological $4,000 level, with momentum indicators turning neutral.
Macro Focus: Fed, Tariffs, and Q3 Outlook
QCP said markets are now focused on upcoming U.S. macro data, including:
Inflation and employment numbers
The impact of tariffs on corporate earnings and consumer prices
The firm expects the Federal Reserve to hold rates steady at the July FOMC meeting, while signaling a data-dependent stance ahead of September — when a potential rate cut is “delicately balanced.”
