QCP, a leading trading firm, has unveiled significant insights into the current cryptocurrency market landscape. With Bitcoin recently dipping below $59,000, analysts from QCP are observing heavy selling pressure, noting miner capitulation as a potential indicator of a market bottom.
Read on to discover how you can profit.
Bitcoin (BTC) has fallen below the critical $60,000 support level, reaching a low of $57,875. QCP’s Telegram update highlighted that Bitcoin miners are showing “signs of capitulation,” a historical marker often associated with price bottoms. They referenced a similar hash rate drawdown in 2022, when BTC plummeted to $17,000.
Despite the ongoing sell-off, the options market remains hopeful. There is a notable skew towards Ethereum (ETH) call options for September and December expiries, indicating bullish sentiment for ETH.
QCP analysts pointed out several potential factors that could reverse the current downtrend.
Both Bitcoin and Ethereum have substantial liquidation clusters on the top side, which could trigger short squeezes and drive prices higher. Additionally, the anticipated approval of S-1 forms for ETH could spark a significant price surge.
QCP suggests a strategic trade involving ETH KIKOs (Knock-In, Knock-Out) to shield investors from downside risks. This strategy involves selling a $3,000 put with a knock-in at $2,500 and buying a $3,600 call with a knock-out at $5,500, all set to expire on September 27, 2024.
This zero-cost strategy offers a maximum annual payout of 271.96%, or $1,900 per ETH, if the spot price ends just below $5,500. However, if the spot price drops below $2,500 at expiry, investors would be obligated to purchase ETH at $3,000.
Data from Coinglass shows that total crypto liquidations have surged by 114% in the past 24 hours, reaching $265 million, as the global market capitalization hit two-month lows. CryptoQuant’s head of research, Julio Moreno, warned that without significant price recovery over the summer, the market could see further miner capitulation. This is because the hashprice (average miner revenue per hash) continues to decline following the latest halving.
CryptoQuant CEO Ki Young Ju suggested that miners face a critical decision: capitulate now or hold out for Bitcoin’s price to climb above $58,000.
Also Read :German Government Offloads $175M Worth of Bitcoin; BTC Price Struggles to Hold $56.5K
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