Asia Morning Update: QCP Attributes Market Momentum to Global Liquidity Over Fed Actions

Asia Morning Briefing – 16/10/2025: QCP Highlights Global Liquidity as Market Driver

QCP Capital’s latest note emphasizes that global markets are shifting from rate sensitivity to liquidity dependence, with central bank balance sheets and cross-border flows now driving risk more than the Fed’s next 25 basis points.

“Central bank purchases, de-dollarization flows, and institutional portfolio hedging have become the primary forces pushing gold higher, extending its relevance beyond a traditional inflation hedge,” QCP wrote. During last weekend’s volatility, the Bitcoin–gold correlation climbed above 0.85, signaling synchronized capital flows across the two asset classes.

Prediction markets are aligning around a gradual Fed easing cycle, favoring gold and digital assets over high-beta risk. On Kalshi, traders currently assign a 76% probability of three rate cuts in 2025, totaling 75 bps, consistent with JP Morgan’s baseline for a “mid-cycle, non-recessionary” scenario. Fed Governor Michelle Bowman reinforced this outlook, calling for two additional cuts by year-end.

Bitcoin is trading within the same liquidity-driven framework. Kalshi markets assign a 51% chance of BTC reaching $130,000 in 2025, 33% for $140,000, and 21% for $150,000, with even odds for touching $150,000 by mid-2026. The market is positioning for a slow-burn rally, as easing expectations filter gradually into real yields and dollar liquidity. Glassnode data shows a cluster of call options at $130,000, suggesting potential short-term volatility but also establishing resistance at that level.

Macro and on-chain signals indicate a steady, liquidity-fueled advance rather than an adrenaline-driven bull market—though markets remain sensitive to unexpected news.

Market Snapshot

• BTC: Trading above $110,500, down 2%, pressured by U.S.–China trade tensions. A breach of $110,000 support could open the path to $96,500–$100,000.
• ETH: Around $3,900, down 4%, as investors scale back exposure amid macro uncertainty. Some see Ethereum eventually tracking gold’s performance.
• Gold: Near $4,141.81/oz as safe-haven demand rises, supported by trade tensions and expectations for Fed rate cuts.
• Nikkei 225: Up 0.95%, following Wall Street gains led by strong bank earnings.

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