QCP Market Update - 1 Oct 23
We are into the final quarter of the year, and crypto markets have taken off like a rocket. In the past 2 weeks, BTC has rallied 15% and up a staggering 9% in the last 3 days!
This comes after a lackluster Q3 (-12% in BTC), which coincided with this year’s Supermoon cycle (from a high of 31,500 at the start of the 3-month cycle on 4 Jul, we ended the cycle last week near the lows at 26,500).
Does this strong bounce mark the start of the long awaited Q4 rally?
Seasonality would argue YES - October is the strongest month on record for BTC, even though Q4 overall has mixed results (Chart 1).
However, we are not fully convinced by this move, and we think that BTC might test super key 25k support sometime in the final quarter of 2023. Four reasons why:
1. This aggressive bounce has been due almost entirely to exogenous factors thus far and might not have the momentum to sustain.
It began with excitement over the impending SEC approvals for the first ETH futures ETFs, then the lower than expected core PCE inflation, and finally the (literally) eleventh hour continuing resolution (CR) deal over the weekend that keeps the US government open 45 more days to Nov 17.
2. In relation to the ETH futures ETF - we all remember full well that after much anticipation for the BTC futures ETF 2 years ago, the launch marked an all-time high in BTC of 69k roughly 25 days after the SEC approval and within the same month ETF trading began! (Chart 2)
There is good reason for this. As prominent on-chain analysts have pointed out, a futures ETF can merely result in synthetic coin being added without an actual impact on spot supply (Chart 3).
We would even go further to say a futures-only ETF is arguably detrimental to spot price - as it potentially directs demand away from the spot market into a synthetic market.
3. While the deal to keep the government open is headline positive in the very near-term, a CR is ironically medium-term bearish as it merely kicks the can (45 days), but at a very high goodwill cost for the chief negotiators on each side.
We would argue that shutting down the government would have been better medium-term for markets, as we set a tradeable low on shutdown headlines.
Historically there have been 5 government shutdowns since 1995 and the S&P 500 traded positive during each one with an average return of 3.2%. In the most recent shutdown, which was the longest in the last 30 years, equities traded more than 10% higher by the end.
4. We think the real market leaders are Real yields and Gold (Chart 4). If this deal re-ignites the upward move in real yields again, then there will be much more pain for risk markets to the downside. A break of 14,500 in Nasdaq or 4250 in S&P 500 will be a move that BTC cannot ignore.
We are taking advantage of this rally to buy downside hedges. We expect the 29-30k resistance to hold on the topside, and with front-end vols still trading in the low 30s, it provides cheap optionality for any sharp downside reversal move.
We are into the final quarter of the year, and crypto markets have taken off like a rocket. In the past 2 weeks, BTC has rallied 15% and up a staggering 9% in the last 3 days!
This comes after a lackluster Q3 (-12% in BTC), which coincided with this year’s Supermoon cycle (from a high of 31,500 at the start of the 3-month cycle on 4 Jul, we ended the cycle last week near the lows at 26,500).
Does this strong bounce mark the start of the long awaited Q4 rally?
Seasonality would argue YES - October is the strongest month on record for BTC, even though Q4 overall has mixed results (Chart 1).
However, we are not fully convinced by this move, and we think that BTC might test super key 25k support sometime in the final quarter of 2023. Four reasons why:
1. This aggressive bounce has been due almost entirely to exogenous factors thus far and might not have the momentum to sustain.
It began with excitement over the impending SEC approvals for the first ETH futures ETFs, then the lower than expected core PCE inflation, and finally the (literally) eleventh hour continuing resolution (CR) deal over the weekend that keeps the US government open 45 more days to Nov 17.
2. In relation to the ETH futures ETF - we all remember full well that after much anticipation for the BTC futures ETF 2 years ago, the launch marked an all-time high in BTC of 69k roughly 25 days after the SEC approval and within the same month ETF trading began! (Chart 2)
There is good reason for this. As prominent on-chain analysts have pointed out, a futures ETF can merely result in synthetic coin being added without an actual impact on spot supply (Chart 3).
We would even go further to say a futures-only ETF is arguably detrimental to spot price - as it potentially directs demand away from the spot market into a synthetic market.
3. While the deal to keep the government open is headline positive in the very near-term, a CR is ironically medium-term bearish as it merely kicks the can (45 days), but at a very high goodwill cost for the chief negotiators on each side.
We would argue that shutting down the government would have been better medium-term for markets, as we set a tradeable low on shutdown headlines.
Historically there have been 5 government shutdowns since 1995 and the S&P 500 traded positive during each one with an average return of 3.2%. In the most recent shutdown, which was the longest in the last 30 years, equities traded more than 10% higher by the end.
4. We think the real market leaders are Real yields and Gold (Chart 4). If this deal re-ignites the upward move in real yields again, then there will be much more pain for risk markets to the downside. A break of 14,500 in Nasdaq or 4250 in S&P 500 will be a move that BTC cannot ignore.
We are taking advantage of this rally to buy downside hedges. We expect the 29-30k resistance to hold on the topside, and with front-end vols still trading in the low 30s, it provides cheap optionality for any sharp downside reversal move.
As we embark on the final quarter of 2023, we are pleased to present “View from the Desk”, where we touch on our token and stablecoin spot trading activities within the year, coupled with insightful market colour.
In 2023, we've witnessed noteworthy developments, particularly in the realm of stablecoins, where events like the USDC and USDT depegging incidents have questioned market stability. In this concise report, we not only delve into the intricate details of our trading flows but also provide an illuminating overview of the pivotal moments in 2023 pertaining to select stablecoins.
At QCP Capital, we remain steadfast in our commitment to delivering efficient fiat-crypto ramps, better execution of trades, and more competitive rates within the ever-evolving cryptocurrency landscape. Stay tuned for a look into our market contributions and the dynamics that have shaped the stablecoin ecosystem this year.
https://qcp.capital/featured-article/view-from-the-desk-stablecoin-and-token-spot-flows/
In 2023, we've witnessed noteworthy developments, particularly in the realm of stablecoins, where events like the USDC and USDT depegging incidents have questioned market stability. In this concise report, we not only delve into the intricate details of our trading flows but also provide an illuminating overview of the pivotal moments in 2023 pertaining to select stablecoins.
At QCP Capital, we remain steadfast in our commitment to delivering efficient fiat-crypto ramps, better execution of trades, and more competitive rates within the ever-evolving cryptocurrency landscape. Stay tuned for a look into our market contributions and the dynamics that have shaped the stablecoin ecosystem this year.
https://qcp.capital/featured-article/view-from-the-desk-stablecoin-and-token-spot-flows/
QCP Capital
Homepage - QCP Capital
Large volume trading in volatile markets requires personalised solutions, round-the-clock support and unparalleled execution. We offer a range of tailored
QCP Market Update - 12 Oct 23
This Q4, BTC and ETH weakness continues unabated, and since Friday's NFP and the weekend Israel-Gaza conflict, has completely decoupled from other macro markets (Chart 1 : Yellow-Nasdaq, Orange-30y UST yield (inverted), Purple-Gold, Blue-BTC, Green-ETH).
Rates markets led a huge reversal post-NFP on Friday, as the capitulation false break of 5% on the 30year UST drove a massive CTA unwind of its short rates and equities position. However crypto has been unable to keep up with this bullish reversal, falling back to the lows for the month.
This bout of weakness is particularly stark as it comes against a backdrop of supposedly bullish factors.
1. October seasonality is the strongest of the year (only 1 down October in the last 9 years)
2. Long-end real rates saw its largest 5-day decline since the March SVB crisis
3. The unprecedented Israel-Gaza conflict occurred over the weekend, which tended to benefit crypto in the past as the weekend hedge
4. Even Gold has bottomed on 2 & 3 after an almost consecutive two week daily sell-off
5. Paul Tudor Jones calling for an increase in BTC allocation on increasing geopolitical and recession risks (link here: https://www.afr.com/chanticleer/why-this-wall-street-titan-is-turning-away-from-stocks-20231011-p5ebhd)
We attribute a large part of why this has happened to the shocking disappointment of the ETH ETF, which has only traded roughly 0.2% (!) of the corresponding BTC ETF volume 2 years ago.
This probably came as a surprise to many who felt institutions were on the verge of massive ETH adoption, although we think it reflects more the scepticism towards futures ETFs in the space now.
Or perhaps crypto traders are too distracted right now listening to soundbites from SBF’s ongoing trial.
To make matters worse, we have a CPI print today (8:30pm SGT) that since Covid 2020, has generally produced upside surprises relative to expectations for this month's release. (Chart 2)
Hopefully the relative underperformance of BTC and ETH to the upside now also mean their beta is lower to the downside as well, should CPI come in stronger than expected.
Otherwise, we continue looking at the key levels of 25-26k on the downside, and 29-30k on the topside as critical to determine the next trend.
This Q4, BTC and ETH weakness continues unabated, and since Friday's NFP and the weekend Israel-Gaza conflict, has completely decoupled from other macro markets (Chart 1 : Yellow-Nasdaq, Orange-30y UST yield (inverted), Purple-Gold, Blue-BTC, Green-ETH).
Rates markets led a huge reversal post-NFP on Friday, as the capitulation false break of 5% on the 30year UST drove a massive CTA unwind of its short rates and equities position. However crypto has been unable to keep up with this bullish reversal, falling back to the lows for the month.
This bout of weakness is particularly stark as it comes against a backdrop of supposedly bullish factors.
1. October seasonality is the strongest of the year (only 1 down October in the last 9 years)
2. Long-end real rates saw its largest 5-day decline since the March SVB crisis
3. The unprecedented Israel-Gaza conflict occurred over the weekend, which tended to benefit crypto in the past as the weekend hedge
4. Even Gold has bottomed on 2 & 3 after an almost consecutive two week daily sell-off
5. Paul Tudor Jones calling for an increase in BTC allocation on increasing geopolitical and recession risks (link here: https://www.afr.com/chanticleer/why-this-wall-street-titan-is-turning-away-from-stocks-20231011-p5ebhd)
We attribute a large part of why this has happened to the shocking disappointment of the ETH ETF, which has only traded roughly 0.2% (!) of the corresponding BTC ETF volume 2 years ago.
This probably came as a surprise to many who felt institutions were on the verge of massive ETH adoption, although we think it reflects more the scepticism towards futures ETFs in the space now.
Or perhaps crypto traders are too distracted right now listening to soundbites from SBF’s ongoing trial.
To make matters worse, we have a CPI print today (8:30pm SGT) that since Covid 2020, has generally produced upside surprises relative to expectations for this month's release. (Chart 2)
Hopefully the relative underperformance of BTC and ETH to the upside now also mean their beta is lower to the downside as well, should CPI come in stronger than expected.
Otherwise, we continue looking at the key levels of 25-26k on the downside, and 29-30k on the topside as critical to determine the next trend.
Web3 Watch – 13 Oct 23
Our latest web3 piece is hot off the press, just in time for your weekend. In this edition, we cover:
🔓Arbitrum grant season
🎯Celsius targets to pay back creditors by end-2023
🥸SocialFi: Exploits galore
💰Binance the stablecoin kingmaker and the curious case of TUSD and FDUSD
📈Ethereum developments
🐕Kabosu, the OG Doge, to be immortalized
Read more here: https://qcp.capital/featured-article/web3-watch-13-oct-23/
Our latest web3 piece is hot off the press, just in time for your weekend. In this edition, we cover:
🔓Arbitrum grant season
🎯Celsius targets to pay back creditors by end-2023
🥸SocialFi: Exploits galore
💰Binance the stablecoin kingmaker and the curious case of TUSD and FDUSD
📈Ethereum developments
🐕Kabosu, the OG Doge, to be immortalized
Read more here: https://qcp.capital/featured-article/web3-watch-13-oct-23/
QCP Capital
Homepage - QCP Capital
Large volume trading in volatile markets requires personalised solutions, round-the-clock support and unparalleled execution. We offer a range of tailored
QCP Market Update - 18 Oct 23 (UPS!)
Monday's Cointelegraph Spot ETF tweet hoax proves that there's only one game in crypto right now - the BTC spot ETF.
The more than $2000 spike and reversal in BTC on the fake news showed the strong anticipation of the industry towards this event.
Unfortunately we do not expect the actual SEC approval for any application or conversion to take place this year, which means the larger BTC trend below 25k or beyond 32k is beholden to macro winds for the rest of Q4.
As yet, the jury is still out on whether we will have a Q4 macro risk-off.
However we believe risks are firmly tilted to the downside from here for equities and bonds, where a selloff on both will drive a major risk-parity catastrophe.
More pertinently, the jury is also out on whether BTC will rally on a "flight to quality" as Blackrock CEO Larry Fink expects (https://x.com/Swan/status/1714006347803443603), or sell-off as a high beta risk asset in such a risk off.
If BTC indeed proves a safe-haven in this sell-off, then we believe that will mark the start of a major multi-month BTC bull market to come.
For this week, we have US earnings starting in earnest today, and Powell speaking on Fri (00:00 SGT).
We are particularly interested in Tesla's earnings after the bell today - whether they have dumped their remaining 25% BTC after revealing they had already sold 75% of their holdings (30,000 Bitcoin) in last quarter's earnings call.
Our main reason for being bearish on equities is the extreme consensus view related to the Q4 seasonal rally.
However, breaking down the NASDAQ return into parallel years - we find that October is a key inflection point for markets, rather than always being the springboard for a rally.
As we approach the end of the global hiking cycle, you would have to believe we were in 2007 or 2017 (flat/positive Q4), rather than closer to 2008 or 2018 or even 2000 (negative Q4) (Chart 1).
We think the biggest trigger will be an exponential rise in US real rates from here, when consensus is again at an extreme expecting lower rates (Chart 2).
Biden and Yellen gave a major shot in the arm for bond vigilantes this week by openly declaring their "ability" to support both the Ukraine war and the Israel war, with Biden's response in particular (https://youtu.be/d403nALfQrE?si=SE7L3qHJSgqni3u6&t=577 ) looking like it will age extremely poorly.
The hospital bombing in Gaza overnight represents a major escalation in the conflict on the eve of Biden's arrival in Israel.
Being the 50th anniversary of the Yom Kippur war, both sides have a vested interest to not back down this time, a risk we believe markets are still underpricing.
Furthermore, with US citizens both killed and taken hostage by Hamas, the US would undoubtedly have to get involved this time.
With Biden setting a major precedent for a sitting US President to personally visit Ground zero of a war zone on the eve of an actual war, this sends a strong message that this time is different.
An outright sell signal for equities would be Iran's direct participation in the conflict, or worse, US boots on the ground.
NASDAQ is showing a bearish ending diagonal (Chart 3) and a sharp move down would no doubt drive BTC out of its 6 month range (Chart 4).
In light of this major catalyst, we have launched a new product to take advantage of the BTC opportunity here.
USDC Denominated Principal Protected Participation Structure (UPS) is an investment product which provides investors exposure to BTC (or ETH) within a fully principal protected structure.
Whether bullish or bearish, buyers of UPS will get exposure to upside or downside BTC (or ETH) moves, whilst ensuring that their principal is protected from the price of the underlying BTC and ETH and returned to them at the end of the tenor.
Get in touch with us to learn more: https://qcp.capital/#contact
Monday's Cointelegraph Spot ETF tweet hoax proves that there's only one game in crypto right now - the BTC spot ETF.
The more than $2000 spike and reversal in BTC on the fake news showed the strong anticipation of the industry towards this event.
Unfortunately we do not expect the actual SEC approval for any application or conversion to take place this year, which means the larger BTC trend below 25k or beyond 32k is beholden to macro winds for the rest of Q4.
As yet, the jury is still out on whether we will have a Q4 macro risk-off.
However we believe risks are firmly tilted to the downside from here for equities and bonds, where a selloff on both will drive a major risk-parity catastrophe.
More pertinently, the jury is also out on whether BTC will rally on a "flight to quality" as Blackrock CEO Larry Fink expects (https://x.com/Swan/status/1714006347803443603), or sell-off as a high beta risk asset in such a risk off.
If BTC indeed proves a safe-haven in this sell-off, then we believe that will mark the start of a major multi-month BTC bull market to come.
For this week, we have US earnings starting in earnest today, and Powell speaking on Fri (00:00 SGT).
We are particularly interested in Tesla's earnings after the bell today - whether they have dumped their remaining 25% BTC after revealing they had already sold 75% of their holdings (30,000 Bitcoin) in last quarter's earnings call.
Our main reason for being bearish on equities is the extreme consensus view related to the Q4 seasonal rally.
However, breaking down the NASDAQ return into parallel years - we find that October is a key inflection point for markets, rather than always being the springboard for a rally.
As we approach the end of the global hiking cycle, you would have to believe we were in 2007 or 2017 (flat/positive Q4), rather than closer to 2008 or 2018 or even 2000 (negative Q4) (Chart 1).
We think the biggest trigger will be an exponential rise in US real rates from here, when consensus is again at an extreme expecting lower rates (Chart 2).
Biden and Yellen gave a major shot in the arm for bond vigilantes this week by openly declaring their "ability" to support both the Ukraine war and the Israel war, with Biden's response in particular (https://youtu.be/d403nALfQrE?si=SE7L3qHJSgqni3u6&t=577 ) looking like it will age extremely poorly.
The hospital bombing in Gaza overnight represents a major escalation in the conflict on the eve of Biden's arrival in Israel.
Being the 50th anniversary of the Yom Kippur war, both sides have a vested interest to not back down this time, a risk we believe markets are still underpricing.
Furthermore, with US citizens both killed and taken hostage by Hamas, the US would undoubtedly have to get involved this time.
With Biden setting a major precedent for a sitting US President to personally visit Ground zero of a war zone on the eve of an actual war, this sends a strong message that this time is different.
An outright sell signal for equities would be Iran's direct participation in the conflict, or worse, US boots on the ground.
NASDAQ is showing a bearish ending diagonal (Chart 3) and a sharp move down would no doubt drive BTC out of its 6 month range (Chart 4).
In light of this major catalyst, we have launched a new product to take advantage of the BTC opportunity here.
USDC Denominated Principal Protected Participation Structure (UPS) is an investment product which provides investors exposure to BTC (or ETH) within a fully principal protected structure.
Whether bullish or bearish, buyers of UPS will get exposure to upside or downside BTC (or ETH) moves, whilst ensuring that their principal is protected from the price of the underlying BTC and ETH and returned to them at the end of the tenor.
Get in touch with us to learn more: https://qcp.capital/#contact
QCP Market Update - 24 Oct 23
We were positioned well into this breakout move, long ETH vol in the Nov and Dec tenors (especially long gamma at the 1700 strike), long ETH risk reversals (long call, short put) and also long BTC vol in the Dec tenor. This allowed us to take on the record two-way option flows from the last few days.
In addition to that, we had a structural long BTC position in the form of a Dec Call Fly (32k/38k/44k). We bought this for $380 per BTC in September when spot level was 26,830 and took profit on this today at $1,020 per BTC (full trade details at the end).
This move continues to be driven by the spot ETF story, in particular the anticipation of it again, that has driven BTC's outsized demand.
While yesterday's headline was not a definite SEC approval, steps taken by Blackrock including a DTCC listing and tickerization (IBTC) gave the market hope that the SEC approval is imminent.
However, we do not think that this signals an impending SEC decision in the coming week.
Instead we believe the SEC will avoid playing the role of kingmaker, sticking with its own precedent set during the BTC/ETH futures ETF approval process and will wait to approve multiple managers at the same time.
As such, by waiting for the next 6-7 applications to reach the listing standards Blackrock has supposedly met, it would likely take us into the start of next year.
Afterall, the SEC would not have already postponed Blackrock's November deadline prematurely knowing otherwise.
For us, Blackrock's early listing yesterday was instead their attempt to remind the market of their "first-mover" status, and cement this differentiation even if the SEC does not award it to them eventually.
Nonetheless with this bullish break of 32k, we believe the market has started to price in an approval as the base case. The only question now is when the approval will happen.
So where do we stand position-wise after all this?
1. We have decided to close out some of our long topside exposure here, ahead of the 36k channel resistance and 38.2% Fib retracement (Chart 1).
2. Our main reason is that this move remains purely anticipatory, and that approval could only take place early next year, much later than the market expects now.
3. With this level of anticipation, initial volumes need to be above the launch of the BTC futures ETF, or risk the kind of disappointment we saw with the ETH futures ETF earlier this month.
3. More importantly, we are seeing stretched positive perp funding rates especially on Deribit (BTC over 70% and ETH over 100%) as well as elevated short-end ATM vols (BTC up to 75%!) - typically indicative of an exhausted short-term move.
4. Risk reversals also reached the most extreme level since the entire past year rally (from -5 to +7.5), and the pullback now to +2.5 is indicative of funds overloaded with long topside and taking profit on their positions.
5. This means that while we believe spot has entered a new higher range between 32k-36k, what the derivative markets are implying looks that levels are a little stretched here.
Going long UPS (which we shared about last week - https://t.me/QCPbroadcast/1089 ) would have worked well in this move. This structure is principal-protected and offers zero-cost exposure to the upside on breakouts like this week.
Alternatively, structures like the BTC Call Fly that we put on, offer excellent risk-reward for anyone looking for topside exposure without having to pay hefty premiums.
BTC Dec 32k/38k/44k Call Fly
Cost: $380 per BTC on 18-Sep (26,830 spot ref)
Maximum payout: ~15.8X
Take-profit: $1,020 per BTC on 24-Oct (33,500 spot ref)
Realized profit multiple: ~2.7X
We were positioned well into this breakout move, long ETH vol in the Nov and Dec tenors (especially long gamma at the 1700 strike), long ETH risk reversals (long call, short put) and also long BTC vol in the Dec tenor. This allowed us to take on the record two-way option flows from the last few days.
In addition to that, we had a structural long BTC position in the form of a Dec Call Fly (32k/38k/44k). We bought this for $380 per BTC in September when spot level was 26,830 and took profit on this today at $1,020 per BTC (full trade details at the end).
This move continues to be driven by the spot ETF story, in particular the anticipation of it again, that has driven BTC's outsized demand.
While yesterday's headline was not a definite SEC approval, steps taken by Blackrock including a DTCC listing and tickerization (IBTC) gave the market hope that the SEC approval is imminent.
However, we do not think that this signals an impending SEC decision in the coming week.
Instead we believe the SEC will avoid playing the role of kingmaker, sticking with its own precedent set during the BTC/ETH futures ETF approval process and will wait to approve multiple managers at the same time.
As such, by waiting for the next 6-7 applications to reach the listing standards Blackrock has supposedly met, it would likely take us into the start of next year.
Afterall, the SEC would not have already postponed Blackrock's November deadline prematurely knowing otherwise.
For us, Blackrock's early listing yesterday was instead their attempt to remind the market of their "first-mover" status, and cement this differentiation even if the SEC does not award it to them eventually.
Nonetheless with this bullish break of 32k, we believe the market has started to price in an approval as the base case. The only question now is when the approval will happen.
So where do we stand position-wise after all this?
1. We have decided to close out some of our long topside exposure here, ahead of the 36k channel resistance and 38.2% Fib retracement (Chart 1).
2. Our main reason is that this move remains purely anticipatory, and that approval could only take place early next year, much later than the market expects now.
3. With this level of anticipation, initial volumes need to be above the launch of the BTC futures ETF, or risk the kind of disappointment we saw with the ETH futures ETF earlier this month.
3. More importantly, we are seeing stretched positive perp funding rates especially on Deribit (BTC over 70% and ETH over 100%) as well as elevated short-end ATM vols (BTC up to 75%!) - typically indicative of an exhausted short-term move.
4. Risk reversals also reached the most extreme level since the entire past year rally (from -5 to +7.5), and the pullback now to +2.5 is indicative of funds overloaded with long topside and taking profit on their positions.
5. This means that while we believe spot has entered a new higher range between 32k-36k, what the derivative markets are implying looks that levels are a little stretched here.
Going long UPS (which we shared about last week - https://t.me/QCPbroadcast/1089 ) would have worked well in this move. This structure is principal-protected and offers zero-cost exposure to the upside on breakouts like this week.
Alternatively, structures like the BTC Call Fly that we put on, offer excellent risk-reward for anyone looking for topside exposure without having to pay hefty premiums.
BTC Dec 32k/38k/44k Call Fly
Cost: $380 per BTC on 18-Sep (26,830 spot ref)
Maximum payout: ~15.8X
Take-profit: $1,020 per BTC on 24-Oct (33,500 spot ref)
Realized profit multiple: ~2.7X
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QCP Market Update - 18 Oct 23 (UPS!)
Monday's Cointelegraph Spot ETF tweet hoax proves that there's only one game in crypto right now - the BTC spot ETF.
The more than $2000 spike and reversal in BTC on the fake news showed the strong anticipation of the…
Monday's Cointelegraph Spot ETF tweet hoax proves that there's only one game in crypto right now - the BTC spot ETF.
The more than $2000 spike and reversal in BTC on the fake news showed the strong anticipation of the…
QCP Market Update - 3 Nov 23
In line with our post last week outlining the key 36k level https://t.me/QCPbroadcast/1094, today BTC kissed the 38.2% Fibonacci retracement and upper channel trendline and backed off (Chart 1).
This latest rally however, was less about spot ETF developments and more about macro forces. This is because a smaller than expected Treasury Q1 supply estimate yesterday and dovish FOMC sent bond yields tumbling and in turn risk assets soaring.
Whether this marks the start of a new global equity and bond uptrend remains to be seen, as the macro picture essentially remains unchanged, outside a correction of overly bearish bond sentiment.
As BTC spot price grinds higher however, perp funding, and term forwards (Chart 2), implied volatility and risk reversals (Chart 3) across the curve continue to remain or extend further at extreme elevated levels. For those positioned for this derivative implied upside breakout, the spot ETF approval cannot come soon enough!
Today after the bell we have Coinbase and Apple earnings, and NFP tomorrow - all of which could perhaps provide fuel to realize the implied volatility and especially lofty call premium.
Above all, it will take the spot ETF approval for us to start the new exponential leg higher. At the same time, we expect only a major rug pull from Gensler will be able to take us back below 32k at this stage.
In line with our post last week outlining the key 36k level https://t.me/QCPbroadcast/1094, today BTC kissed the 38.2% Fibonacci retracement and upper channel trendline and backed off (Chart 1).
This latest rally however, was less about spot ETF developments and more about macro forces. This is because a smaller than expected Treasury Q1 supply estimate yesterday and dovish FOMC sent bond yields tumbling and in turn risk assets soaring.
Whether this marks the start of a new global equity and bond uptrend remains to be seen, as the macro picture essentially remains unchanged, outside a correction of overly bearish bond sentiment.
As BTC spot price grinds higher however, perp funding, and term forwards (Chart 2), implied volatility and risk reversals (Chart 3) across the curve continue to remain or extend further at extreme elevated levels. For those positioned for this derivative implied upside breakout, the spot ETF approval cannot come soon enough!
Today after the bell we have Coinbase and Apple earnings, and NFP tomorrow - all of which could perhaps provide fuel to realize the implied volatility and especially lofty call premium.
Above all, it will take the spot ETF approval for us to start the new exponential leg higher. At the same time, we expect only a major rug pull from Gensler will be able to take us back below 32k at this stage.