Thread by @QCPCapital

𝗤𝗖𝗣 𝗠𝗮𝗿𝗸𝗲𝘁 𝗨𝗽𝗱𝗮𝘁𝗲 𝟯𝟬 𝗝𝘂𝗻

1/ Positive start to the week as we enter the second half of 2020 with promising bounce off the lows.

2/ Since the 26 Jun technical alert , BTC price rallied above 36,400 level yesterday, still 3,000 points from the 39,400 BTCUSD target level. We saw the defining low last Tuesday following our tweet flagging “Turnaround Tuesdays”

3/ Since then, BTC has found good support at the 30k level. Leaning on this, we've formed a moderately bullish bias.
Our favourite trade continues to be short BTC strangles within the 30k/40k range (from the 21Jun broadcast)

4/ With psychological resistance at 40k and strong support at 30k, there's a good chance that BTC trades in this 10k range in the near future which would likely cause vols to collapse

5/ Market makers are also likely to still be long vega and gamma, a large offload would easily see implieds drop to 70 handle. ETH, on the other hand, seems to have some upside momentum on this leg higher, with ETHBTC spot rallying back above 0.06

6/ Possibly on the back of upcoming EIP-1559* (explanation below in footnote). Selling ETH puts is a decent trade with 25d Risk-reversals still at a high -13 level, strongly benefiting put sellers in spite of the the upcoming bullish event

7/ On a broader note we think the market might be underpricing the recent acceptance of crypto by sovereigns (El Salvador & Paraguay). These might not be huge countries but we think it's a watershed in BTC's transition from a speculative instrument to an investment-grade asset

8/ It completes the five levels of adoption from (1) crypto natives, to (2) retail speculators, to (3) high-networths/family offices, to (4) funds/corporates and finally to (5) acceptance by sovereigns and the diversification of national treasuries to BTC and crypto.

9/ ..This solidifies our medium-to-long term bullish bias for BTC.

𝘌𝘐𝘗-1559 𝘦𝘹𝘱𝘭𝘢𝘯𝘢𝘵𝘪𝘰𝘯:

With EIP-1559, users can expect lower gas fee volatility due to a restructuring of the transaction process..

10/ Moving forward, gas fees will be quoted by the protocol as a fixed price, with a base fee as a foundation. Of more interest might be the introduction of a fee-burning mechanism, where the aforementioned base fees are taken aside and burnt.

11/ This has created a bullish narrative on the street for ETH becoming more "Bitcoin-like" due to a curtailing of ETH supply. In reality, the introduction of this mechanism has the potential to cause greater volatility;

12/ ..total supply over time now becomes impossible to determine due to the base fee changing in tandem with network congestion.

13/ full report here qcpcapital.medium.com/market-update-…