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.
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.
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.
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.
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