1/ Another try at breaking 40k-42k in BTCUSD today despite Amazonโs 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 Fridayโs 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
1/ We turned bullish last Wed but werenโt expecting the short squeeze to happen quite so soon! Weโve been pleasantly surprised by how supported the market was after Wednesday & sentiment flipped decisively bullish into the weekend
2/ The QCP options desk took down a decent amount of front-end call buying flow in the last few days. Of particular note was the call demand from one or two large players who lifted about 2,500 BTC notional of close-date calls across 33k-36k strikes
3/ Market was nervously bid as we approached the 35-36k short gamma region. Dips were brief and shallow, coupled with the non-stop call buying requests popping up late into Asia night on Sunday
1/ There's been much talk about the upcoming GBTC share unlocks which begin in earnest next week. We've discussed Grayscale and GBTC previously but would like to go into greater detail in the second part of this note
2/ GBTC is still primarily a retail vehicle, where the known public institutional holders account for 12.21% of the total outstanding shares - of which 3AC is the largest shareholder at 5.62%, holding a very auspicious 38,888,888 shares. The upcoming unlocks are for..
3/ ..institutional holders who subscribed directly to GBTC 6 months ago & this batch consists of all the new Q1/2021 positions, largely ARK's last tranche. To be clear- we dont expect these unlocks on its own to have significant impact on the overall market outside of GBTC itself
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 โTurnaround Tuesdaysโ
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)
The FOMC meeting last week had hawkish sentiments that the market wasn't expecting or pricing into the June meeting
2/ From an objective perspective it was a rather neutral decision, as Chair Powell kept talking up the transitory nature of inflation and the rest of the committee had kept their longer-run inflation forecasts close to 2% as well, indicating they believed the same
3/ However the shift in stance at this meeting itself - where Powell said that they would begin talking about tapering, rather than talking about talking about doing it, which was earlier than most expected, and showed that this FOMC under Powell had a red line too..
1/ The market looks like it's long gamma with BTC being pinned around the 40k level as we await FOMC headlines tomorrow. We agree with Paul Tudor Jones that this coming FOMC meeting will likely have a binary market reaction
3/ Should the Fed remain dovish, cryptocurrencies would have the most upside potential until September at least. Especially given the overselling we've seen relative to other macro markets since the May CPI printโฆ
1/ BTC Implied Volatilities have been coming off steadily since it peaked the weekend before and is looking to move towards levels we saw at the start of May
2/ We are still cautious of potential BTC downside as the vol skew remains high with Puts being substantially more expensive than Calls
3/ We expect spot to trade in a range (short-term) with a slight bullish bias as frenzied leveraged longs have been washed out. Weโve seen significant buying & selling at 30,000 BTCUSD and 40,000 BTCUSD levels respectively