Bitcoin Retraces Back To $43K, Why The Next Few Months Could Be Bullish

Reynaldo Marquez

1 year ago

3 mins read

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Bitcoin found short-term support near $43,000 as it retraces some of its gains from the current week. The first crypto by market cap is displaying more strength and managed to close February’s monthly candle in the green, something that last happened back in Q4, 2021.

At the time of writing, Bitcoin trades at $43,985 with a 16.9% profit over the past week.

Bitcoin BTC BTCUSD — BTC trends to the upside on the 4-hour chart. Source: BTCUSD Tradingview

In a recent update from QCP Capital, the firm reiterated its bullish stand. As NewsBTC recently reported, the firm published a monthly report on the crypto market and made a deep dive into the factors impacting BTC’s price at the moment.

Of course, the Russia-Ukraine conflict is one of the most significant. QCP Capital explored the market performance after a conflict has started, comparing the current situation with the 2001 U.S. invasion of Afghanistan and the Crimea crisis of 2014.

On several occasions, when major arm conflicts erupt, the market reacts to the downside but sees some subsequent relief. QCP Capital wrote:

Historically, war-related sell-offs have been great buying opportunities, particularly large-scale war involving superpower. In the Vietnam war (1964) Gulf War (1991), Afghan War (2001), Iraq War (2003) and Crimean Crisis (2014), markets saw positive returns for 3-6 months after the invasion.

Conversely, QCP Capital expects other macro events to bring volatility to Bitcoin and the crypto market. The first will take place on March 10^th, when the U.S. is set to publish its latest Consumer Price Index (CPI) print. QCP Capital added:

In the next few weeks, we expect volatility from significant macro events. US CPI on 10 March and the FOMC rate decision on 16 March will shift the market’s focus back on the Fed.

A Bullish Period For Bitcoin Before Bears Take Back Control?

A high CPI was bullish for BTC and cryptocurrencies in 2020 and for a good portion of the pandemic, but it became a bearish factor as the FED hinted at a shift in its monetary policy to stop inflation. Now, the market is uncertain about the FED’s reaction to the conflict, and its potential impact on inflation. QCP Capital said:

The market is keen to see how the Fed responds to war and the severe inflationary impact that has followed. Already Powell’s testimony earlier today in the House was noticeably more dovish and the probability of a 50 bps hike in March has been priced down.

Thus, potentially contributing to Bitcoin’s recent relief rally from the mid-levels at $30,000s, and why the bulls could remain in control for a couple of months. The market was expecting a more aggressive FED, and the next FOMC meeting could clear out a lot of the uncertainty surrounding BTC’s future performance.

A dovish FED could imply more gains for BTC’s price in the coming months. However, QCP Capital doesn’t rule out potential downside risks going into Q3 as market participants reduce risk to adjust to the monetary tightening.

The Russia-Ukraine conflict might have had unforeseen consequences, as it highlights the importance of cryptocurrencies as an alternative to the legacy financial system. In the coming years, Bitcoin and the crypto market, QCP Capital said, could support one of the most important wealth transfers in history.

Thus, why any potential downside price action could be an opportunity for bullish investors. The firm added:

(…) this coming dip could be the best opportunity to build up a structural long position in crypto. The war has instigated a tectonic shift that we think will form the foundations of a multi-decade crypto bull run in time to come.

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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