Bitcoin must leverage $1T central bank liquidity to beat sellers — research

cointelegraph.com:

Bitcoin (BTC) hodlers need to watch the central banks of China and Japan as well as the United States as BTC/USD battles “huge” resistance.

That was the opinion of trading firm QCP Capital, which in its latest crypto market research piece, “The Crypto Circular,” warned that Bitcoin faces risks far beyond the Federal Reserve.

Having survived the latest flood of macroeconomic data from the U.S., Bitcoin is nonetheless flagging right below $25,000 as bulls run out of momentum.

For QCP Capital, there is now reason to believe that risk factors for price performance will come not just from the Fed but China and Japan.

Market participants must now contend with such issues as China’s Consumer Price Index (CPI) as well as the U.S. equivalent, along with Japanese central bank policy changes.

“While the jury is out on BTC’s value as an inflation hedge, it cannot be denied that it is the most direct global liquidity proxy, as it is not tied to any one central bank or nation,” the research argues.

Bitcoin is sensitive to global liquidity, and when central banks inject it, this marks an incentive for growth in and of itself. That argument is already popular, with others also eyeing how “liquidity junkie” Bitcoin will navigate changes in central bank liquidity this year.

“And while we were focused on USD liquidity – from the Fed’s QT and Reserve balance, we’ve missed the massive liquidity injection by the Bank of Japan (BOJ) and People’s Bank of China (PBOC) over the past 3 months,” QCP continues.

QCP refers to the dichotomy between U.S. policy and China and Japan — quantitative tightening (QT) versus quantitative easing (QE). Regardless of what the Fed does, extra liquidity in one place is all but guaranteed to trickle into risk assets such