Bitcoin Holds $80,000 Support; Break Above $88,000 in Focus
Summary
- QCP Capital said Bitcoin is finding strong support at $80,000 and that the direction of any break from the $80,000 to $88,000 range will be the key driver of its short-term trend.
- QCP said falling U.S. Treasury yields and a 15% chance of an October rate hike are providing some support for Bitcoin's recovery.
- QCP said deleveraging in the stock market could threaten Bitcoin's $80,000 support, but stronger U.S. Treasuries and weaker real yields and dollar could create a favorable backdrop for Bitcoin.
Forecast Trend Report by Period
Bitcoin is holding support near $80,000 despite weakness in technology stocks, and whether it breaks out of the $80,000 to $88,000 range will be a key driver of its short-term direction, according to QCP Capital.
The digital-asset trading firm wrote in a post on X on Oct. 19 that Bitcoin is currently trading in the $80,000 to $83,000 range and finding strong support at $80,000.
QCP said Bitcoin has remained relatively stable even as technology shares, including semiconductor stocks, come under pressure from rising credit risk tied to artificial intelligence-related companies. It also cited the five-year credit default swap premium on AI cloud company CoreWeave rising above 1,100 basis points as a sign of market concern over debt-fueled AI investment.
The firm said the U.S. rate backdrop is also offering some support for Bitcoin's recovery. After a stronger-than-expected consumer price index report, the U.S. two-year Treasury yield rose above 4.9% and the 10-year yield topped 5.3%, before retreating on safe-haven demand. QCP added that market pricing for an October rate hike had fallen to 15% after comments on Oct. 16 by Kevin Warsh, chair of the U.S. central bank.
Still, further deleveraging in equities could spill into the crypto market and put Bitcoin's $80,000 support under pressure, the firm said. By contrast, continued strength in U.S. Treasuries, along with weaker real yields and a softer dollar, could create a more favorable backdrop for the token.
QCP said implied volatility in the Bitcoin options market has recently fallen below its one-year average. It said a sustained break out of the $80,000 to $88,000 range could quickly lift both spot prices and volatility. The firm also cited earnings reports and investment plans from major technology companies due this week as another factor that could determine market direction.
