Bitcoin Sees Sudden Boost Amid Mt. Gox Rumors, But QCP Capital Targets $22,000

The cryptocurrency market, notably dominated by Bitcoin, has always been a terrain of speculation and market sentiment. Rumors and speculations have surfaced with Bitcoin’s recent slight uptick in value. Market insiders point towards the potential delay of the Mt. Gox repayments as a key driver.

However, QCP Capital, a crypto trading firm, remains skeptical about a sustained rally and holds a bearish outlook, indicating that global economic factors could play against the cryptocurrency.

Mt. Gox Delay Rumors Fuel Bitcoin Rally

Mt. Gox, the once-dominant Bitcoin exchange that faced a sudden downfall in 2014, is back in the news. With the April deadline for its creditors to submit repayment information having passed, there was an expectation of repayments by the end of October.

But recent rumors suggest a delay in this timeline to 2024. These speculations seem to have significantly influenced Bitcoin’s price dynamics. QCP Capital, in its market analysis, notes:

A large reason we’re seeing for this bounce is rumors of a Mt. Gox delay to 2024.

The trading firm believes many might have taken a short position expecting repayments soon, and any official delay announcement might spur a considerable short squeeze in the market.

However, the very nature of this rally has made experts cautious. Mt. Gox has a sizable cache of assets set for distribution, including 142,000 BTC (worth approximately $3.9 billion), 143,000 BCH, and 69 billion Japanese yen. Such a vast amount entering the market might create unpredictable price movements.

QCP Capital’s Cautionary Stance

Despite the recent price rally, QCP Capital’s forecast for Bitcoin remains bearish. The firm is still eyeing the $22,000 mark for BTC in the forthcoming month. They expect this uptick to be “short-lived,” with global risks looming over the cryptocurrency market in the fourth quarter.

Further dissecting the market movements, QCP mentioned:

The current Wave 2 of our C Wave expanded flat has so far bounced which we expected, but we still need to see the crucial Wave 3 that breaks the local lows for our count to be intact.

A break above $32,000 would invalidate their current assessment, according to the firm. While the imminent Federal Open Market Committee (FOMC) interest rate decision looms large, QCP sees a parallel to the market conditions of 2020, right before the infamous Covid crash.

Although there’s market speculation around a potential volatility squeeze, QCP believes that a pause in rate hikes by the FOMC is the more likely outcome.

But challenges persist, “At the same time, we do not see how Powell can assuredly call an end to this hiking cycle,” the firm adds, pointing to rising inflation and other economic factors. Additionally, concerns about a potential US government shutdown and increasing oil prices add to the economic uncertainty.

In QCP’s assessment, the stock market might witness a downturn without Federal Reserve intervention, potentially dragging Bitcoin with it. The firm concluded:

In such a scenario without Fed easing, equities will likely be down, taking Bitcoin down along with it until the Fed acts.

Featured image from iStock, Chart from TradingView