QCP analysts caution that crypto recovery may be short-lived amid macroeconomic risks

Crypto markets have rebounded after last week’s market downturn, but analysts at QCP Capital warn the recovery may be short-lived due to persistent macroeconomic risks. The analysts highlighted risks, including the ongoing market shutdown, U.S.-China tariff tensions, and credit market volatility.

QCP analysts believe the recent surge was driven by the Senate’s vote last Sunday, which advanced legislation to reopen the U.S. government. The bill’s approval sparked synchronized gains across crypto, gold, and equities. 

Senate’s bill approval drives crypto market higher

Shivam Thakral, CEO of BuyYcoin, believes that the resolution would restore investor confidence, reduce uncertainty around federal spending and liquidity, and improve overall risk sentiment. He added that an end to the shutdown could also support the dollar’s stability, easing volatility and encouraging institutional participation in the crypto industry. Traders on Polymarket showed a 96% probability that the shutdown will end between November 12 and 15. 

The analysts at the Singapore-based trading desk argued that the development is just a short-term reprieve that avoids holiday disruptions. They called it a textbook case of kick-the-can policymaking that doesn’t resolve the structural issue but only removes immediate tail risks.

At the time of publication, Bitcoin is trading at $102,600, down nearly 1% in the past 24 hours. BTC has also dropped by more than 10.5% in the past month, amid the recent market shutdown. CryptoQuant confirmed that Bitcoin’s growth rate fell during the shutdown,  from 16.75% on October 1 to 6.60% on November 10.

QCP analysts also argued that although the shutdown has paused official data releases, private data has continued to inform the Federal Reserve’s data-driven policy-making narrative. They noted that the NFIB Small Business Index is showing a modest drop in sentiment, driven by firms reporting stable operations amid slower sales expectations, margin compression, and hiring frictions.

The analysts argued that Thursday’s inflation data could set the tone for the market for the remainder of the year. Lee said Bitcoin could close the fourth quarter on a positive note if inflation data stays contained and liquidity improves. He added that a potential rate cut and a weaker dollar could be key drivers that will enhance risk appetite.

Rachel Lin, CEO and co-founder of SynFutures, also cautioned that intraday volatility could rise. She believes that a standoff between continued over-the-counter/institutional accumulation and headline-driven liquidity shocks will drive prices. 

However, QCP analysts maintained that the chances of another Fed rate cut and resilient corporate earnings should support risk sentiment and Bitcoin into the end of the year. According to the CME FedWatch tool, there’s a 65.4% chance of the Fed cutting rates by another 25 basis points during the next FOMC meeting on December 10.

U.S. Government shutdown affects crypto market’s growth

CryptoQuant analysts noted that the shutdown caused significant uncertainty, which directly affected the growth of the crypto market. They said the shutdown raised concerns about global volatility and also halted regulatory approvals.

The analytics firm noted that the Market Cap Growth Rate showed a downturn in crypto market growth between October 1 and November 10. According to CryptoQuant’s indicator, the drop resulted in a $408 billion aggregate market cap loss.

CryptoQuant analysts said that mid- and small-cap assets experienced the most dramatic decline during the shutdown, with their growth rate dropping from 18.57% on October 1 to just 0.21% on November 10. The analytics firm argued that the drop in growth rates among smaller assets reflects risk aversion amid a lack of macroeconomic data and the postponement of key legislation.

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