However, as QCP Capital writes in its latest market , there are early signs that should caution crypto investors. While the gold price is currently performing extremely strongly, the trading firm raises the question of whether this will continue if the expected wave five of the USD rally takes place based on the Elliott wave theory.
According to the theory, the fifth wave is the final leg in the direction of the prevailing trend. And a resurgent USD could mean further price losses not only for gold but also Bitcoin and crypto. As QCP Capital elicits, it remains to be seen if this will impact the other alternative asset classes as well.
7/ And overall liquidity, measured by M2 YoY growth, has shrunk to 0% for the first time in history! Not to mention the liquidity within crypto itself which is an even smaller factor of that — QCP (@QCPgroup)
Price Targets For Bitcoin And Ethereum
Nonetheless, Bitcoin and Ethereum are in somewhat of a catch-up rally at the beginning of the year, much like gold. Despite the mini-rally, BTC is still trading in an extremely tight falling wedge, with 18k as the key breakout level on the upside, according to the firm.In the medium-term, $28,000 is looking more and more key – as the head and shoulders neckline, and 61.8% fibonacci retracement level of the $3,858 2020 low to $69,000 2021 high.
The Macro Outlook For 2023
Probably decisive for whether 2023 will be a continuation of 2022 will be the macro environment. QCP Capital believes that inflation in the U.S. will fall significantly, but not enough to reach the Fed’s 2% target.
This will cause the Fed to delay cutting rates as long as possible, as Jerome Powell does not want to be the guy in charge who makes the same mistake as in the 1970-80s when there was a “double-dip inflation era.”
At press time, the BTC price stood at $16,847, seeing a slight gain of 0,59% in the last 24 hours.We expect this could only come in Oct-Nov again this year, but remain open minded to markets bottoming sooner than that.
