The upcoming Federal Reserve meeting on January 31 and the publication of the US Treasury’s plans for borrowing can affect the volume of liquidity and, as a result, the dynamics of the first cryptocurrency. Analysts reported this QCP Capital.
In the first case, experts are waiting for information on the rate of reduction of the Central Bank balance sheet. Their slowdown will support the volume of liquidity in the system.
In the second case, analysts expect the ministry to maintain the previous tactics of concentrating placements of short-term securities.
In their opinion, there are two reasons for this:
- US presidential elections in November. Maintaining an influx of liquidity and growth in American stocks is beneficial to the current administration (in this case, the Secretary of the Treasury has a better chance of retaining his position).
- In anticipation of the Fed’s key rate cut, the US Treasury will defer borrowing in long-term securities to a time when interest payments are lower.
The implementation of such a scenario will be positive for risky assets and cryptocurrencies in particular, experts pointed out. Otherwise, bond yields will rise, which will lead to a wave of sales in the stock market, they added.
Experts explained the current decline of Bitcoin below $40,000 by the pressure of liquidations of GBTC with a remaining AUM of $21 billion and fears of Mt.Gox creditors exiting their positions. This could potentially trigger an additional supply of 142,000-200,000 BTC, they estimated.
CryptoQuant analysts pointed to increased selling pressure from whales.
“Previously, shrimp-like retail investors (<1 BTC) dominated. Now large players are moving to take profits,” – they wrote.
Let us remind you that Galaxy Digital CEO Mike Novogratz downplayed the impact of GBTC sales on the prospects for digital gold.
Earlier, a number of experts noted the dependence of the price on the wave of liquidation of positions in the exchange-traded fund from Grayscale.
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2024-01-25 16:16:52
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