QCP Capital Attributes Bitcoin’s Decline to Trump’s Recession Stance

The price of the leading cryptocurrency hit new lows for the year, falling below $80,000 as a leading indicator for risky assets, according to a report by QCP Capital.

Experts pointed to an interview with US President Donald Trump, who showed indifference to recession risks, as the trigger.

Despite his reputation as a stock market defender, he allowed for a correction—a “rectification” of the state through a downturn on Wall Street.

QCP Capital noted the decline in US government bond yields and the weakening of the US dollar, historically positive factors for risky assets.

Analysts observed demand for “long-term” call options with “upper” expirations, indicating readiness for a quick rebound from support at the $75,000 level.

Matrixport believes that optimism regarding the short-term dynamics of the cryptocurrency market is unjustified. They noted a slowdown in the inflow of funds into stablecoins as a leading indicator of improving sentiment.

Is a Recession Looming?

Recently, JPMorgan increased the probability of a recession from 30% to 40% “due to extreme US policies.”

Goldman Sachs revised their corresponding parameter from 15% to 20%. Experts are ready to increase the estimate if “the Trump administration remains committed to its policy even in the face of much worse data.”

Anthony Pompliano saw in the actions of the US president a desire to achieve a reduction in the key rate from the Fed by creating increased uncertainty.

According to CME FedWatch, the chances of easing monetary policy at the May meeting are estimated at 48%. A month ago, the figure was 21.9%.

Technical Outlook

The Kobeissi Letter suggested a wave of short covering in risky assets after reaching a level of extreme fear.

“Markets do not move in a straight line in the long term. Eventually, a short squeeze is inevitable,” they wrote.

Researcher Timothy Peterson calculated that since 1990, the VIX fear index was higher only 11% of the time.

“The probability of hitting the bottom today is 89%,” he assessed.

The chances of a rebound may be strengthened by a bullish divergence on the RSI on the four-hour timeframe, according to trader nicknamed Cas Abbe.

Analyst Rekt Capital recommended monitoring oscillator signals on the daily chart to confirm a sustainable return to a growth trajectory.

Leverage Washout

CryptoQuant noted a sharp drop in open interest in Bitcoin and Ethereum futures, indicating a “leverage washout” and chances for market stabilization.

The total figure decreased by $1.37 billion—$668 million of which was in digital gold, and $700 million in the second-largest cryptocurrency by market capitalization.

Back in April, YouHodler’s Head of Markets Ruslan Lienkha expressed concern about the current correction. The expert noted that it could develop into a medium-term bearish trend.

Earlier, former BitMEX CEO Arthur Hayes did not rule out a drop in Bitcoin to $70,000 before recovery.

CryptoQuant CEO Ki Young Ju suggested a prolonged consolidation of the asset within a wide range (e.g., $75,000-$100,000), as observed in early 2024 before returning to growth.