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.
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.
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