Yesterday, Singapore-based cryptocurrency trading firm, QCP Capital provided an analysis of the current state of the crypto market, highlighting the independent behavior of Bitcoin (BTC) and Ethereum (ETH) in relation to traditional macroeconomic factors.
According to QCP Capital, both BTC and ETH have shown a remarkable indifference to macroeconomic headlines and market movements. Their correlations with traditional macro drivers, such as the USD and equities, have dwindled to nearly zero.
Since the significant market activity triggered by the XRP ruling earlier this month, the crypto market has been relatively quiet, moving sideways. This period has also seen a contraction in fringe sectors like Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi), and a continued consolidation within the industry.
However, QCP Capital anticipates a potential increase in market volatility and a significant price surge in BTC towards the end of the year and into the next. This expectation is driven by factors such as the upcoming ruling on Blackrock’s spot ETF and the impending Bitcoin Halving event.
Evidence of this expectation can be seen in the steep volatility curve and a persistent call skew, with BTC call options trading at a higher volatility than put options.
Despite the current sideways market, Accumulators, a zero-cost strategy suitable for professional and accredited investors, have performed exceptionally well. This strategy allows investors to systematically purchase BTC or ETH on a weekly basis at a 10% discount to the spot price, provided the spot price trades within a pre-specified range.
If the spot price trades outside of this range, either no purchase is made and the collateral is returned, or additional coins are purchased at the 10% discount-to-spot price, depending on the direction of the price movement.
QCP Capital suggests that Accumulators are an ideal strategy for investors looking to build a long coin position ahead of the next bull run, especially in a medium-term range market with a bullish long-term bias.
An example provided by QCP Capital illustrates how an investor could have been buying coins weekly at discounted prices, given the current market conditions. The firm believes that the conditions to implement such a trade are even more favorable now than they were last month.