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QCP Capital Bullish On Bitcoin & Ethereum: Zero-Correlation To Macro Drivers

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Cryptocurrency enthusiasts are rejoicing as QCP Capital, a prominent crypto asset trading firm in Singapore, maintains its bullish stance on Bitcoin (BTC) and Ethereum (ETH). Despite a lack of interest in traditional market fluctuations and macroeconomic headlines, QCP Capital remains optimistic about the leading cryptocurrencies.

Bitcoin & Ethereum’s Optimistic Outlook

According to the telegram post, the latest market update reveals that Bitcoin and ETH have significantly reduced their correlation with traditional macro drivers such as the USD and equities, with the correlation almost reaching zero.

While the overall market has been relatively subdued and moving sideways following the XRP ruling’s surge earlier this month, there is a growing expectation of heightened volatility and a potential surge in BTC prices towards the year-end and next year. Traders are closely monitoring the Blackrock spot ETF ruling and the Bitcoin Halving, anticipating potential significant price movements.

Interestingly, amidst this sideways market, a strategy called “Accumulators” has garnered attention for its impressive performance. Available exclusively to professional and accredited investors, Accumulators provide a zero-cost approach to acquire BTC or ETH weekly at a 10% discount to the spot price within a predetermined range. If the spot price moves outside of this range, the purchase is halted, ensuring a protective mechanism for investors.

This strategy appeals to investors looking to systematically accumulate coins at discounted rates in preparation for major price shifts. Institutional and accredited investors have already embraced Accumulators to build their coin balance ahead of substantial price moves.

For instance, an investor who initiated an Accumulator trade last month at $26.6k and $1,750 spot reference has consistently purchased coins at $24k and $1,570 as long as BTC and ETH trade below $30k and $1920 for the week.

Based on the most recent price analysis, Bitcoin is presently valued at $29,403.93, having experienced a 0.41% increase over the past 24 hours. On the other hand, ETH is currently priced at $1,866.05, reflecting a decrease of 0.48% in the last 24 hours. 

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(BTC one day Chart) Source: Coinmarketcap

The present market conditions appear even more favorable for implementing such a strategy, with the investor potentially receiving coin deliveries at approximately $26.5k and $1680 weekly for up to the next 20 weeks.

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(ETH one day Chart) Source: Coinmarketcap

Nevertheless, as crypto enthusiasts eagerly await the predicted price surges, Accumulators presents a compelling opportunity for sophisticated investors to secure discounted coin acquisitions before the market makes its decisive moves.

Related Reading | Litecoin Halving Sparks Aggressive Accumulation Among Key Traders, Santiment Reports

Bitcoin’s Surge & ETH’s Consolidation Amidst Upcoming US Recession: Insights

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QCP Capital, a Singapore-based crypto trading firm, has released its latest market analysis on the performance of Bitcoin (BTC) and Ethereum (ETH) in the face of the upcoming US recession. The report highlights that the next directional leg for BTC/ETH spot and vol will be largely driven by economic data releases starting from next week.

The report states that Bitcoin has had its best quarter since Q1 2021, gaining over 70% in the first quarter of 2023. The surge in BTC’s price was turbocharged by the problems in the US financial system this month, triggered by a bank run that led to the first US bank failure since 2008.

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US Recession & Bitcoin’s Performance: The Big Question

While the resilience of Bitcoin shows that it is not an inflation hedge, it is certainly a hedge against monetary irresponsibility. However, the report notes that the biggest question mark for QCP Capital is how BTC will perform in the coming US recession, as a recession is an unproven event in BTC’s short 14-year history.

The report further states that ETH looks decidedly less bullish than BTC and continues trading in its consolidation triangle. QCP Capital recommends selling ETH calls at these levels, especially the 1-month 1900 strike and 3-month 2000 and 2200 strikes.

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Looking past quarter-end, QCP Capital expects a busy month ahead data-wise, and these economic data releases will likely drive the next directional leg for BTC/ETH spot and vol. 

The report also notes that markets have largely brushed off the CFTC-Binance civil suit and that it is likely to go the same way as a suit against Bitmex a few years back, where a large settlement was reached to conclude the affair.

QCP Capital has positioned itself short vol into tomorrow’s large quarter-end option expiry, expecting sellers to come in ahead of the big expiry roll tomorrow and before buyers step in again next week.

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The speed of the recent spot move and lack of traders’ conviction has left the open interest map spread rather thinly across strikes.

Nevertheless, QCP Capital’s market analysis suggests that BTC’s resilience shows that it is a hedge against monetary irresponsibility. However, the biggest question mark for QCP Capital is how BTC will perform in the coming US recession. 

The report recommends selling ETH calls at these levels and expects economic data releases to drive the next directional leg for BTC/ETH spot and vol.

Related Reading | Bitcoin’s Steady Pursuit Of $30K: Insights & Cautionary Flags From Santiment

Bitcoin (BTC) Market Sentiment Flips: Risk Reversals Show Bullish Shift

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The Bitcoin (BTC) options market has seen a sudden shift in sentiment, with risk reversals trading into positive territory for the first time since 2021. 

This means that calls are now more expensive than puts across multiple tenors, a highly unusual occurrence that is typically not seen in the Bitcoin market.

QCP Capital, a full-suite crypto trading firm, today tweeted that the options market appears to be showing signs of a sudden shift in sentiment. 

This sudden flip from bearish to bullish sentiment is being seen as a microcosm of the larger changes happening in the macro markets and is a clear indication of the volatility and unpredictability of the current market conditions.

This development is being closely watched by market analysts and investors as it could potentially signal a turning point in the Bitcoin market.

In the tweet, the investment firm stated that the market conditions are vastly different from the bearishness seen in Q4 2022 and that the current state of the options market makes it seem as though the recent FTX incident never occurred.

Unprecedented Shift in Bitcoin (BTC) Options Market

According to QCP Capital, one key observation is that BTC risk reversals have traded into positive territory for multiple tenors. This is highly unusual, as Bitcoin typically has persistent Put skew due to miner and treasury hedging activity. 

Additionally, QCP Capital noted that ETH implied volatility has fallen in general, indicating a sense of “complacency as the market prices out the fear of prices collapsing.” However, this could change in light of the upcoming Shanghai Upgrade, which is set to unlock more than 16 million ETH.

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On the trading front, QCP Capital reported that it is seeing signs of FOMO on the trading desk, with many traders buying high delta calls and going long spots in an attempt to chase the top side. 

However, the investment firm warned that the upcoming FOMC on February 1st could cause the market to become more cautious, as the market has been signaling to the Fed that talk is cheap.

Furthermore, QCP Capital noted that the next CPI, set to be released on Valentine’s Day next month, could potentially break the heart of the bulls. 

The Cleveland Fed’s inflation Nowcast model is currently tracking at a whopping 0.58% M/M, which could officially be 0.6% M/M if the forecast is accurate. This is a significant number that throws a curveball at the market’s optimistic view on inflation.

Lastly, QCP Capital expressed concern about the positive divergence seen in the USD and Gold prices, which have been leading and driving crypto prices. 

The USD is starting to show massive positive divergence, trading in an ending diagonal pattern, which could lead to a sharp and violent breakout to the topside. As for Gold, the $1890-$1900 support level is crucial and must remain above this level for the crypto uptrend to hold.

Related Reading | Bitcoin Enters Early Bull Phase Amidst Market Uncertainty, Says CryptoQuant CEO