Bitcoin Fails to Retest $122,800 High Amid Muted Rally
Bitcoin briefly rose to $118,640 on Wednesday before falling 2.6% to around $115,700, failing to reclaim its record high of $122,800, marking a situation reminiscent of the movie “Groundhog Day.”
Trading firm QCP Capital suggested the muted price action despite positive catalysts could signal potential late-cycle behavior. “Price action has failed to respond meaningfully to a string of positive headlines,” the firm noted.
These positive headlines included the U.S. Securities and Exchange Commission’s Wednesday approval of in-kind redemptions for Bitcoin and Ethereum ETFs.
QCP Capital also highlighted risks including “excess leverage in altcoins” that could spark broader market volatility, alongside “overcrowded positioning” in short positions on the U.S. dollar, which recently saw a strong rally.
Brookings Institution fellow Robin Brooks identified the dollar’s sharp move as a “classic short squeeze.” He expects the move to challenge persistent bearish narratives about the dollar.
With the rising dollar index often pressuring Bitcoin’s value, the regulatory landscape continues evolving, exemplified by the recent 160-page report from the President’s Working Group on Digital Asset Markets. However, the report noted many large players remain sidelined until further clarity is achieved.
