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Bitcoin (BTC) surged to a new all-time high of $93,480 during the New York session on November 14, fueled by the release of US inflation data that met market expectations. 

Both headline and core inflation rates came in at 2.60% and 3.30%, respectively, giving a boost to investor confidence. This rally has also driven the total global cryptocurrency market capitalization above $3 trillion, surpassing its previous peak of $2.77 trillion in 2021.

According to QCP Capital, a digital asset management firm, Bitcoin’s impressive upward momentum since the US election has positioned the cryptocurrency near the $100,000 to $120,000 range. However, QCP Capital has raised concerns about the sustainability of the current market rally, pointing out several key risk factors that could influence the market’s direction in the near term.

One of the major observations made by QCP Capital is the decline in implied volatility (implied vols) as the market moves upward. 

Many large players in the market, QCP Capital noted, were positioned for Bitcoin’s rally and have been selling calls into the rising prices. This has led to a reduction in implied volatility, even as Bitcoin hits new highs.

The firm also highlighted the increasing leverage in the altcoin market. With heavy leveraged buying, perpetual funding rates for altcoins have surged to between 50-100%. QCP Capital warned that this could pose a significant risk of deleveraging, which may lead to sharp market corrections.

Despite these risks, QCP Capital believes that the sustained strength in Bitcoin reflects a broader market shift. The firm linked the rally to the growing anticipation of former President Donald Trump’s potential return to office. 

Trump’s proposals, including the idea of creating a strategic Bitcoin reserve and shifting away from gold, have provided a narrative that continues to support Bitcoin’s price performance.

At the time of writing, BTC is priced at $88,157.61 after witnessing a 1.73% fall in just one day, according to CoinMarketCap data.