Cryptocurrency market performance continues to be weak. Bitcoin has fluctuated and fallen below US$67,300 in the past week, and last night it once fell below US$63,400, reaching as low as US$63,379; Ethereum has been trending stronger than Bitcoin with the advancement of spot ETFs and the conclusion of Consensys’ investigation into Ethereum. , once touched $3,653 on the 17th, but has now fallen back to about $3,500.
There is actually a lot of good news about Bitcoin, such as MicroStrategy adding an additional 12,000 Bitcoins at an average price of US$65,883; Michael Dell, founder of computer giant Dell , tweeted about Bitcoin; and Arthur Hayes, General Manager made bullish remarks. However, these news failed to drive the rise of mainstream currencies such as Bitcoin.
In this regard, digital asset trading company QCP Capital issued an article explaining its views.
Reasons for market downturn
QCP Capital said miners are facing significant selling pressure given higher post-halving breakeven prices. Miners' BTC holdings have fallen to their lowest level in the past 14 years, with total reserves reduced by 50,000 from the beginning of the year. On the 14th, QCP stated that Bitcoin miners were experiencing “capitulation” after the halving, thus limiting price increases.
In addition, QCP Capital mentioned that the German government sold approximately 3,000 BTC in the past few days, and nearly 47,000 BTC have not yet been sold. The emergence of this new large supply has also caused market concerns. Crypto trader @DaanCrypto, who has more than 370,000 followers, claimed at the time that the recent increase in short positions and the decline in the Bitcoin market could be due to the German government’s selling.
The market is heavily buying September to December calls
In terms of the options market, QCP Capital said that they observed a large amount of selling of call options expiring within one month, but a large amount of buying of call options from September to December. This shows that the market expects little price movement in the short term, but there may be potential for significant gains before the end of the year. In other words, markets are set to consolidate over the summer, with the potential for a breakout during the U.S. election.
On the other hand, in anticipation of the imminent launch of an ETH spot ETF, the implied volatility of ETH is at a premium of 18% to BTC, indicating that investors have stronger bullish sentiment towards ETH.
According to data from the options trading platform Deribit, a Bitcoin call option that expires on September 27 with a strike price of $90,000, and a Bitcoin call option that expires on December 27 with a strike price of $75,000 are traded The top two Bitcoin call options by volume show that the market has high expectations for Bitcoin prices to hit new highs in the fourth quarter of this year.
