QCP Says Market is Bracing for an Unexpected Upswing

Market Anticipating Positive Surprise, QCP Predicts
Ruholamin Haqshanas
Last updated:
June 12, 2024 10:51 EDT
|
2 min read
QCP Capital is feeling hopeful about market sentiment, pointing out several factors that signal a potentially bullish future for the market.
In a recent report, QCP highlighted that BTC futures swap points have bounced off recent lows of 10% and surged yesterday.
This indicates that traders are taking profits on their basis trades by closing their short futures positions.
With the right trigger, there is a strong chance that yields could climb higher, surpassing the 15% threshold.
Traders Show Interest in Call Options
QCP also noted another positive indicator – the aggressive buying of 13-Jun calls today, along with a significant increase in the funding rate.
This suggests that the market is gearing up for what QCP describes as an “upside surprise.”
It implies that market participants are expecting a positive development that could lead to a significant uptick in prices.
With equity markets consistently hitting record highs for the second consecutive close, QCP believes that an inline CPI (Consumer Price Index) report and a neutral outcome from the FOMC meeting could act as catalysts to drive the crypto market to retest previous highs.
In this bullish environment, QCP presents a trade idea focusing on ERKOs (Exotic Return Knockout options).
They highlight the BTC 28-Jun Call ERKO as an attractive opportunity with a favorable risk-to-reward ratio and minimal cash requirement.
This ERKO has a strike price of 68k and a knockout level at 75k. If the BTC spot price remains just below 75k at expiry, there is a potential max payout of 5.6 times the initial investment.
The cost per BTC for this ERKO is $1,250, with the spot reference at 67,800.
Bitcoin Sees Rise After CPI Data
The U.S. CPI for May surprised economists by remaining flat, exceeding expectations for a 0.1% increase and showing a decline from April’s 0.3% growth.
On a year-over-year basis, CPI increased by 3.3%, slightly below analyst forecasts and the previous month’s reading of 3.4%.
Core CPI, which excludes food and energy costs, saw a 0.2% increase in May, outperforming expectations for a 0.3% rise and surpassing April’s 0.3% growth.
Year-over-year, core CPI rose by 3.4%, slightly below expectations for 3.5% and April’s reading of 3.6%.
Bitcoin reacted positively to the lower-than-expected inflation figures, jumping to $69,400, a nearly 4% increase over the past 24 hours.
The subdued inflation data is seen as positive for Bitcoin, following concerns about rising inflation that had previously led to a drop in BTC prices.
Traders had anticipated multiple interest rate cuts by year-end, but those expectations have lessened after the recent CPI report.
The CME FedWatch Tool showed market participants now anticipate only one or two rate cuts, with the first not expected until September.
The cryptocurrency market has shown heightened sensitivity to U.S. economic data, with recent inflation figures impacting Bitcoin prices.
The hotter-than-expected inflation readings and reduced hopes for rate cuts resulted in a decline in Bitcoin’s value from its all-time high of over $73,000 in March to below $57,000 in May.
Traders are now hoping for looser monetary conditions to drive the next phase of the crypto rally towards record prices.
Follow Us on Google News