Bitcoin Holds $80,000 Support; Break Above $88,000 Seen as Key Test
Summary
- QCP Capital said Bitcoin is finding strong support at $80,000, and whether it breaks out of the $80,000-$88,000 range will be the key factor in its short-term direction.
- It said falling US yields and a market-implied 15% chance of an October rate hike are offering some support for Bitcoin's recovery.
- It said the $80,000 support level could come under threat if equity markets see further deleveraging, while a Treasury rally and weaker real yields and the dollar could create a favorable environment for Bitcoin.
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Bitcoin is holding support near $80,000 despite weakness in technology stocks, with a break out of the $80,000-$88,000 range likely to determine its short-term direction, QCP Capital said.
On Oct. 19, the crypto trading firm wrote on X that Bitcoin was trading in a range of $80,000 to $83,000 and was finding strong support at $80,000.
QCP said Bitcoin has remained relatively stable even as technology shares, including semiconductor stocks, came under pressure from rising credit risk among artificial intelligence-related companies. It cited AI cloud company CoreWeave's five-year credit-default swap spread topping 1,100 basis points as a sign of market concern over debt-fueled AI investment.
US rate conditions are also providing some support for Bitcoin's recovery. After a hotter-than-expected consumer price index report, the US two-year Treasury yield rose above 4.9% and the 10-year yield climbed past 5.3%, before retreating on demand for safe-haven assets. QCP added that, following remarks by Federal Reserve Chair Kevin Warsh on Oct. 16, the market-implied probability of an October rate hike had fallen to 15%.
Still, QCP said further deleveraging in equity markets could spill over into crypto and threaten Bitcoin's $80,000 support level. By contrast, continued strength in US Treasuries combined with weaker real yields and a softer dollar would create a more favorable backdrop for Bitcoin.
QCP said implied volatility in the Bitcoin options market has recently fallen below its one-year average. It added that a sustained break outside the $80,000-$88,000 range could quickly lift both spot prices and volatility. Earnings reports and investment plans from major technology companies due this week were also cited as factors that could shape the market's direction.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.