Digital asset trading company QCP Capital released an analysis today on the recent sluggish cryptocurrency market and stated that they have observed a significant selling of options expiring within one month, but a large buying of options from September to December, indicating that the market expects price limitations in the short term but anticipates a market breakout during the US election period.
Cryptocurrency market performance remains weak. Bitcoin has fallen below $67,300 in the past week and dropped to a low of $63,379 last night, briefly dipping below $63,400. Ethereum, on the other hand, has shown stronger momentum, reaching $3,653 on the 17th before oscillating back to around $3,500. This is attributed to news such as the introduction of a spot ETF and the conclusion of Consensys’ investigation into Ethereum.
There have been several positive news for Bitcoin as well, such as MicroStrategy’s additional purchase of 12,000 BTC at an average price of $65,883, Michael Dell, the founder of Dell, mentioning Bitcoin in a tweet, and Arthur Hayes expressing bullish views on the macroeconomic aspect. However, these news items have failed to drive up the prices of Bitcoin and other mainstream coins.
In response to this, QCP Capital has provided an explanation in their article.
Bitcoin Price Chart
Reasons for the Market Slump
QCP Capital states that miners are facing immense selling pressure due to the higher breakeven price after the halving. The amount of Bitcoin held by miners has reached its lowest level in the past 14 years, with a total decrease of 50,000 BTC since the beginning of the year. On the 14th, QCP already mentioned that Bitcoin miners are experiencing a post-halving “surrender,” thereby limiting price increases.
Additionally, QCP Capital mentions that the German government has sold approximately 3,000 BTC in the past few days, with nearly 47,000 BTC yet to be sold. The emergence of this new large supply has also caused market concerns. Cryptocurrency trader @DaanCrypto, who has over 370,000 followers, claimed at the time that the increase in short positions and the decline in the Bitcoin market may be due to the German government’s selling.
Market’s Significant Buying of Options from September to December
Regarding the options market, QCP Capital states that they have observed a significant selling of options expiring within one month, but a large buying of options from September to December. This indicates that the market expects little price volatility in the short term but significant potential for an increase before the end of the year. In other words, the market is expected to consolidate during the summer, with the possibility of a market breakout during the US election period.
Furthermore, the implied volatility of ETH is 18% higher than that of BTC, indicating a stronger bullish sentiment towards ETH as investors anticipate the launch of ETH spot ETF.
According to data from options trading platform Deribit, the Bitcoin call options expiring on September 27 with a strike price of $90,000 and the Bitcoin call options expiring on December 27 with a strike price of $75,000 rank as the top two Bitcoin call options in terms of trading volume, indicating a high market expectation for a new all-time high in Bitcoin’s price in the fourth quarter of this year.
Top five BTC options trading volume on that day | Source: Deribit
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