Thread by @QCPCapital

𝗤𝗖𝗣 𝗠𝗮𝗿𝗸𝗲𝘁 𝗨𝗽𝗱𝗮𝘁𝗲 𝟮𝟴 𝗝𝘂𝗹𝘆

1/ Another try at breaking 40k-42k in BTCUSD today despite Amazon’s firm denial of the rumors about them accepting crypto as a mode of payment

2/ The QCP options desk saw the same pattern of flow in the options market that occurred before the Monday rally, a wave of call buying (over 2,000 BTC notional at 42k-44k strikes across 3-week expiries)

3/ In addition, there was an unusual spike in the FTX margin lending rate to 300% in line with the large spot buying on FTX at the same time

4/ However, the vol market reacted quite differently this time round with signs of stress to the topside. Unlike the previous rally which only saw front end vols spike while the back-end remained stable, this time back-end vols moved higher tandem with the spike in front-end vols

5/ There was also a substantial shift in skew towards the upside as market anticipates a potential rally above 40k pivot level in BTCUSD.

6/ Technical analysis for BTC:

In our wave count, this rally is the last part (Wave Z in a zig-zag WXYZ pattern) of a corrective Wave 4 (before Wave 5 lower). We are likely to see some resistance here at the TDST resistance level (40k) plus a potential TD 9 sell signal tomorrow

7/ In spite of this resistance, this Wave Z could be a longer one (currently at wave iii of iv in the Z rally) which would see BTC break 42k and potentially even extend to 50k (as per our price analog from the previous two posts)

8/ That last burst higher would end wave 4 to be followed by a larger Wave 5 lower. Technical analysis aside, our sense is that the market will keep look to trade this 30-40k range in the near-term. Into Friday’s month-end expiry, we expect 40-42k to hold..

9/ ..as the OI peaks here with 11k BTC notional. We expect this level to act as a magnet into Friday's expiry with the long gamma in the market pinning it to this price region.

10/ Regarding ETHBTC, we are more bullish ETH over BTC and look for this cross to trade higher over the medium-term. We are looking at the 0.055 level as support for the Wave 4 triangle to end - and Wave 5 higher to begin

11/ This coincides with our parabolic line support that intersects 0.055 on 4-5th Aug, perfectly aligned with the EIP-1559 date. For ETH itself, 2.4k is the range resistance that would need to break to see a move higher. ETH too will print a TD 9 sell tomorrow

12/ Full update here qcpcapital.medium.com/market-update-…