New York Colour
QCP Capital2024/07/11 03:16
By:Sue Ann Sim
- Crypto prices corrected violently in Asia today with BTC and ETH trading below $54,000 and $2,900 respectively, before recovering to $55,000 and $2,950 ahead of the US open.
- Front-end vols spiked as market makers scrambled to buy gamma.
Reasons for the dip
- The market reacted to news of imminent BTC supply which included transfers by Mt. Gox and the German Government. Speculators likely oversold heavily in anticipation, triggering liquidations around $58,000 in thin markets over the US holiday.
Our view
- Spot prices have stabilised suggesting decent support around 54k. Panic has also died down with front-end vols easing significantly from 65 to below 50 for BTC and from 80 to 62 for ETH.
- Today’s US jobs data showed downward revisions for both the April and May numbers. This confirms Powell’s disinflationary path and potentially earlier rate cuts with both September and December starting to price a higher probability.
Trade Idea
The desk has seen a rush from clients to deploy Accumulators today. The vol spike plus dip in spot price allows one to collect ETH below 2700 (a 9.6% discount!)
ETH Accumulator
Buy ETH spot at 9.6% discount (2,680) every week
Maturity: 27SEP24 (12 Weeks)
Strike: 2,680 (-9.62%)
Upper Barrier: 3,550 (+19.73%)
Observation Frequency: Weekly
Spot Ref: 2,960 ETHUSD
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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