Viewpoint: Bitcoin is still likely to reach new highs in the medium term, but we need to be wary of short-term momentum depletion

Singapore's cryptocurrency investment firm QCP Capital has issued a statement stating that Bitcoin is still firmly locked in a narrow range and is difficult to break through the $120000 mark, while sustained buying interest around $116000 continues to provide support. As Ethereum approaches the psychological resistance level of $4000, its upward momentum seems to be gradually weakening, and momentum indicators are becoming increasingly neutral. From a structural perspective, the continuous inflow of institutional funds and favorable regulatory dynamics indicate that Bitcoin is still likely to reach new highs in the medium term. Institutional investors such as Strategy and SharpLink Gaming are continuously raising funds to purchase Bitcoin, highlighting their long-term confidence in Bitcoin assets. However, caution still needs to be maintained. The price trend failed to respond substantively to a series of positive news, including regulatory support for cryptocurrencies in the United States and positive developments in spot and derivative ETFs. From historical experience, the market stagnates despite frequent positive news, often indicating a short-term decline in momentum. The lack of follow-up on positive news is a typical market performance in the later stages of the cycle. At the macro level, the overcrowding of short positions in the US dollar poses potential risks. CFTC data shows that traders have significantly shorted the US dollar against the Japanese yen, with the US dollar depreciating by 10% this year. The market is becoming increasingly vulnerable to the impact of short selling of the US dollar, which may trigger simultaneous selling of risky assets such as stocks, emerging markets, and cryptocurrencies. Meanwhile, the tariff war is still ongoing. Now turn your attention to the upcoming macro data, especially the inflation and employment data of the United States, which are crucial for judging the trend of the third quarter. As the impact of tariffs gradually spreads to corporate profit margins and consumer prices, the third quarter may become an important turning point. The market is closely monitoring the movements of the Federal Reserve. It is expected that the Federal Reserve will maintain interest rates unchanged at the FOMC meeting in July, and policy makers may emphasize data dependence before the key meeting in September, when the possibility of a rate cut remains difficult to discern.