QCP Capital: Supply surge and macroeconomic difficulties caused Bitcoin price to fall sharply

In a recent market report, QCP Capital noted that the market experienced a sharp correction, with Bitcoin prices falling from $70,000 to nearly $60,000, and that this decline was mainly caused by an unexpected surge in Bitcoin supply. Several key events contributed to this supply shock, including the release of approximately 28,000 Bitcoins by the US government, the distribution of 33,960 Bitcoins in the Mt Gox settlement agreement, and the distribution of $1.5 billion worth of Bitcoin and Ethereum by Genesis creditors, which together exerted significant downward pressure on the market. In addition to the increase in supply, QCP also highlighted that the mining difficulty level surged by 10.5% to an all-time high, which put additional pressure on miners to liquidate their holdings. Macroeconomic indicators also fueled the bearish sentiment. QCP pointed out that the higher-than-expected 4.3% US unemployment rate and concerns about an impending recession have heightened investor concerns. QCP analysts highlighted that the CBOE Volatility Index (VIX), a key measure of market volatility, surged above 28, its highest level since the regional banking crisis in March 2023, further fueling market unease. Despite turbulent market conditions, volatility for both Bitcoin and Ethereum remained relatively stable, with Bitcoin’s front-end volatility rising slightly from 45% to 48%, while the latter’s volatility remained unchanged. Market strategists interpreted this as a signal that despite recent turmoil, the market expects price volatility to stabilize in the coming months. (News.bitcoin)