Bitcoin is still range trading on the lower timeframe, gaining a little more than 0.8% on the daily chart but 14% on the 7-day chart.

Bitcoin is flat. Source: Tradingview

General market sentiment has turned bullish as investors appear to be waiting for a breakout in the fourth quarter of 2021.

Investment firm QCP Capital believes that the price of BTC recently returned to an average of $ 50,000 due to a short squeeze. Triggered by the high liquidity in short positions, the massive upward movement came from the Chinese crypto exchanges.

In addition, QCP Capital noticed, that that the institutes pushed Bitcoin back to $ 50,000, as demonstrated by the open interest in CME and rising futures premiums.

Open Interest CME increased. Source: Skew

Annual premium increased for 1 month. Source: Skew

Other additional optimistic factors are: the uncertainty surrounding the Chinese debt bomb Evergrande has disappeared, the approval of a potential futures-based Bitcoin ETF, the growing credibility of BTC as a trading vehicle.

However, QCP Capital points out a number of potential obstacles that could prevent BTC from reaching its previous ATH and rising higher. First, the amount of leverage represented by the aggregated open interest of BTC futures is three times higher than it was in October 2020.

Source: Skew

In the previous months, BTC price has seen significant downward movements as the leverage of the futures reaches a certain point. In addition, QCP Capital said:

“Despite the spot recovery, the options market continues to show bearish concerns. Risk reversal ETH (RR) is still skewed downwards (put is more expensive than call). BTC has just moved from a continuous downward trend to a neutral trend. “

What could happen to Bitcoin?

QCP assumes that there will be declining price movements for Bitcoin in the short term, as the Tom Demark Sequential, an indicator of an overstretching of the price movement in a certain direction, on July 10th. a TD 13 sell-signal flashed.

The source: QCP capital

A separate report from investment firm CoinShares says there are three factors to assess in the fourth quarter of 2021: regulation, adoption, and the macro environment.

Regarding regulation, CoinShares believes the US is “starting to get along with cryptocurrencies,” according to certain statements made by the chairman of the Fed and the SEC.

The impact of El Salvador’s introduction of BTC may also have been underestimated. After the introduction of the Bitcoin law, many countries like Ukraine, Brazil, Paraguay etc. have expressed their desire to make BTC a legal currency and possibly kick off a new wave of institutional adoption.

Finally, macroecological factors with high inflation, rising commodity prices, deteriorating employment conditions and others could further fuel the storage of valuable assets like Bitcoin.

“… It is likely that Bitcoin will appreciate against these currencies, even if its purchasing power continues to stagnate.”

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Annie

According to Newsbtc

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