Crypto Market’s “Shallow Sell-Off” Indicative Of Strong Bid For Risk Assets: Trading Firm

Ash Tiwari

8 months ago

3 mins read

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Crypto trading firm QCP Capital says the “shallow sell-off” in crypto markets following Iran’s recent attack on Israel indicates healthy market demand for risk-on assets.

Crypto Market Remains Well Bid For Risk Assets

Despite Iran launching over 180 missiles toward Israel yesterday, the sell-off in traditional financial (TradFi) assets was relatively muted. The S&P 500 closed 1% lower, while U.S. benchmark West Texas Intermediate (WTI) oil prices rose 2%.

In contrast, the digital assets market was hit relatively harder, with Bitcoin (BTC) sliding more than 5% following Iran’s attack. The total crypto market cap eroded over 6% in value while liquidations surpassed $550 million in the past 24 hours, data from CoinGlass indicates.

In the report, QCP Capital says that the premier cryptocurrency seems to have found strong support at the $60k level. However, the firm cautions that further escalation in the Middle East might force BTC to drop to $55k.

Regarding the market sell-off witnessed yesterday, the trading firm stated:

Middle East geopolitics will steal the limelight for now, but the shallow sell-off suggests that the market remains well bid for risk assets. This minor setback shouldn’t distract from the bigger picture.

The report also remarked that China’s recent economic policy actions are similar to those of Japan in the 1990s. Notably, the Bank of Japan (BoJ) tackled deflation by reducing interest rates, introducing negative interest rates, and starting the quantitative easing program. The report added:

The flush of liquidity from the PBoC and potential fiscal support will likely support asset prices in China, with bullish sentiment potentially spilling over globally to support risk assets, including crypto.

Additionally, the report pointed to the US Federal Reserve (Fed) Chair Jerome Powell’s recent dovish remarks at the National Association for Business Economics, signaling further interest rate cuts in 2024.

For context, the Fed cut rates for the first time in 4 years on September 18. Subsequently, financial markets worldwide experienced a surge in the price of risk-on assets, such as stocks and cryptocurrencies.

The report concluded that “asset prices are expected to remain supported heading into 2025”, buoyed by aggressive interest rate cuts by both the largest (Fed) and third largest (People’s Bank of China) central banks in the world.

What To Expect From Bitcoin In Q4 2024?

Although the Iran-Israel conflict directly impacted BTC’s price, crypto analysts remain optimistic about a potentially strong Q4 2024. One analyst suggested that the recent dip could represent BTC’s “quarterly low.”

Another crypto analyst Eric Crown opined that BTC could reach new all-time-high (ATH) value in Q4 2024, basing his analysis on the cryptocurrency’s historical performance in the months following September. Bitcoin trades at $61,992 at press time, down 1.2% over the last 24 hours.

bitcoin — BTC makes a slight recovery after three red candles on the daily chart | Source: BTCUSDT on TradingView.com

Ash Tiwari

Ash is a dedicated crypto researcher and blockchain enthusiast with a passion for diving deep into the evolving world of decentralized technologies. With a background in writing and a natural curiosity for how digital assets are shaping the future, he has immersed himself in various sectors of the cryptocurrency space, including decentralized finance (DeFi), NFTs, and liquidity mining. His journey into crypto started with a desire to fully understand the technology behind it, leading him to explore and engage with these systems firsthand.

Ash’s approach to DeFi goes beyond surface-level research as he actively participates in decentralized protocols, testing their functionality to gain a deeper understanding of how they operate. From experimenting with staking mechanisms to exploring liquidity mining strategies, he is hands-on in his exploration, which allows him to provide practical, real-world insights that go far beyond theoretical knowledge. This immersive experience has helped him develop a comprehensive grasp of smart contracts, token governance, and the broader implications of decentralized platforms on the future of finance.

In the NFT space, Ash’s interest is driven by the technology’s potential to reshape ownership and creativity in the digital age. He has explored various NFT projects, gaining insights into how these digital assets function within different ecosystems. His focus is on understanding the evolving relationship between creators and communities, as well as the innovative uses of blockchain technology to establish authenticity and provenance in the digital world. Ash’s research in this area often touches on the intersection of culture, technology, and community-driven projects.

A key area of his expertise lies in liquidity mining, where he has engaged with various decentralized platforms to understand how liquidity provision contributes to the functionality and security of DeFi ecosystems. Ash’s hands-on involvement has allowed him to analyze the risks, rewards, and broader implications of liquidity pools, giving him a well-rounded perspective on this integral part of DeFi. His understanding of risk management and protocol design allows him to provide insights into how these systems can be navigated effectively, with an emphasis on both opportunity and caution.

When it comes to communicating these complex topics, Ash’s writing is grounded in clarity and depth. He excels at breaking down intricate blockchain concepts into easily digestible information for a wide audience. Whether explaining the workings of decentralized exchanges or outlining the future potential of blockchain technology, Ash ensures that his content is accessible to both those new to the space and experienced participants looking for deeper insights.

Beyond DeFi and NFTs, Ash explores a wide array of emerging blockchain applications. His research spans areas like cross-chain technologies, decentralized governance, and blockchain’s potential to integrate with traditional finance. He is continuously learning and adapting to the latest developments, ensuring that his insights are both timely and relevant. His interest extends to how these technologies are creating new possibilities for decentralization, transparency, and trust in a variety of industries.

Ash’s commitment to engaging with the crypto space firsthand gives him a unique perspective that goes beyond what can be learned from research alone. His practical involvement allows him to stay ahead of the curve, offering readers and enthusiasts a clear and comprehensive understanding of the rapidly evolving world of blockchain. Whether delving into the technical mechanics of DeFi or exploring the cultural impact of NFTs, Ash’s approach is always rooted in curiosity, research, and a desire to make this technology accessible to all.

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