Bitcoin (BTC<\/a>) hodlers need to watch the central banks of China and Japan as well as the United States as BTC\/USD battles \u201chuge\u201d resistance.<\/p>\n That was the opinion of trading firm QCP Capital, which in its latest crypto market research piece, \u201cThe Crypto Circular<\/a>,\u201d warned that Bitcoin faces risks far beyond the Federal Reserve.<\/p>\n 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.<\/p>\n For QCP Capital, there is now reason to believe that risk factors for price performance will come not just from the Fed \u2014 but China and Japan.<\/p>\n Market participants must now contend with such issues as China\u2019s Consumer Price Index (CPI) as well as the U.S. equivalent, along with Japanese central bank policy changes.<\/p>\n \u201cWhile the jury is out on BTC\u2019s 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,\u201d the research argues.<\/p>\n 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<\/a>, with others also eyeing how \u201cliquidity junkie<\/a>\u201d Bitcoin will navigate changes in central bank liquidity this year.<\/p>\n \u201cAnd while we were focused on USD liquidity \u2014 from the Fed\u2019s QT and Reserve balance, we\u2019ve missed the massive liquidity injection by the Bank of Japan (BOJ) and People\u2019s Bank of China (PBOC) over the past 3 months,\u201d QCP continues. <\/p>\n \u201cContrary to consensus, central banks have net added $1 trillion of liquidity since the market\u2019s bottom in October 2022, with the PBOC and BOJ the largest contributors.\u201d<\/p><\/blockquote>\n QCP refers to the dichotomy between U.S. policy and China and Japan \u2014 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 as crypto.<\/p>\n \u201cHence, such a large injection of liquidity will no doubt find its way to crypto, even despite what appears to be the current US administration\u2019s best efforts to prevent that,\u201d it says.<\/p>\n Versus net $1 trillion of liquidity injections, the Fed has reduced its balance sheet to its lowest levels since September 2021.<\/p>\n \u201cWhat this means is that apart from US data and Fed guidance now, which ultimately still holds the highest beta for market moves, we also have to be conscious of BOJ and PBOC liquidity injections,\u201d QCP writes. <\/p>\n \u201cAny reversal of liquidity from these 2 sources would remove the underlying support that BTC has seen this past month.\u201d<\/p><\/blockquote>\n Going forward, however, liquidity fans face formidable resistance when it comes to Bitcoin, with order books showing sellers lying in wait en masse<\/em> closer to $30,000.<\/p>\n Related:\u00a0Can Bitcoin price hold $24K as stocks correlation hits lowest since 2021?<\/a><\/em><\/strong><\/p>\n $25,000 is already causing enough problems, QCP warned, acknowledging that rejection at that level would mean that resistance from mid-2022 remains in control. <\/p>\n As Cointelegraph reported<\/a>, that issue is also being watched by popular trader and analyst, Rekt Capital.<\/p>\n #BTC<\/a> is pulling back in for a retest<\/p>\n Needs to hold the confluent area below for the retest to be successful$BTC<\/a> #Crypto<\/a> #Bitcoin<\/a> https:\/\/t.co\/ISYqnU5bkY<\/a> pic.twitter.com\/Vx2eV3fLDA<\/a><\/p>\n \u2014 Rekt Capital (@rektcapital) February 22, 2023<\/a><\/p><\/blockquote>\n \u201cBTC \u2014 A potential double top is forming against the August 2022 correction high, and May 2022 reaction is low at 25,300. Above that we have the huge 28,800\u201330,000 resistance which is the Head and Shoulders neckline,\u201d the research confirms.<\/p>\n BTC\/USD traded at around $23,700 at the time of writing, near one-week lows, according to data from Cointelegraph Markets Pro<\/a> and TradingView<\/a>.\u00a0<\/p>\n The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/p>\n<\/div>\nBitcoin \u201cmost direct global liquidity proxy\u201d<\/h2>\n
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Research reiterates \u201cdouble top\u201d warning\u00a0<\/h2>\n
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