As the US markets went on holiday, Bitcoin’s price unexpectedly surpassed $90,000. Traditionally, the period between Thanksgiving and Christmas is known for stock market rallies. The recent decline in cryptocurrencies was largely driven by discussions around the AI bubble. Consequently, the stock market’s gains yesterday provided a boost to Bitcoin 
$78,823. However, how long will this upward trend continue?
Bitcoin’s Ascent
QCP Capital analysts perceive the rise in Bitcoin’s price due to improved risk perception as a healthy sign. The likelihood of an interest rate cut on December 10, which had dropped to 30% last week, now exceeds 80%. Moreover, with the meeting date approaching, the Federal Reserve’s decision appears almost certain, and significant events would be required for any reversal in expectations.
There are no major reports expected in the near future. Therefore, it is likely that the anticipation of an interest rate cut will dominate until the meeting, with a decision in that direction expected to be announced. The Federal Reserve does not favor surprises, and the market has already factored in a rate cut. The crucial aspect will be the details regarding balance sheet expansion in both the decision statement and Federal Reserve Chair Powell’s comments after the December announcement.
Insights from QCP on Cryptocurrencies
Analysts focusing on Nvidia, Strategy, and Options markets shared brief evaluations concerning these areas. While MSTR’s mNAV significantly dropped, the market note published by JPMorgan against it played a role. Although the largest Bitcoin treasury company has no bankruptcy risk, sudden drops in its stock price negatively impact market sentiment. Over the past month, MSTR fell by 40.59%, now trading at $175 after surpassing an all-time high (ATH) of $434.
In summary, the analysts’ evaluations are as follows:
“AI-related CDS and technology credits continue to widen, indicating investors are reassessing dominant macro factors. Nvidia’s sharp rise in receivables and inventories, combined with extended sales collection periods, raises questions about whether AI capital expenditure growth is driven by actual final demand or forward purchases.”
“Crypto ETFs keep recording net outflows, with several crypto asset products being liquidated. Most are currently trading below 1 mNAV, reflecting a broader risk-aversion trend. As Bitcoin’s treasury approaches its breakeven point and its shares are placed on MSCI’s delisting watch list, Strategy becomes a focal point again. Index-focused sales may negatively impact on-chain liquidity.”
“Towards the year-end, Bitcoin faces a mix of adverse flows and supportive options. While the correlation with AI stocks strengthens, the fear and greed index declined. Demand for downside protection remains high, and open positions have shifted towards call options, yet both positioning and implied volatility have decreased.”
