Asia Colour

After struggling to break above 61k over the weekend, crypto dipped lower following a second assassination attempt on Trump. This downward move was worsened by the liquidation of nearly $70 million in long positions before the Asia open, where liquidity was thin.

Despite a bearish start, it’s worth noting that BTC rallied 13.8% from 58k to 66k during the same week as Trump’s first assassination attempt on July 13.

Could we see a similar recovery rally this week? It’s certainly an eventful week for crypto, with Token2049 ongoing and the FOMC meeting on Wednesday (18 Sep), where uncertainty remains around whether there will be a 25bps or 50bps cut.

As we approach the first Fed rate cut of this cycle, market tensions are rising, amplifying the impact of any unexpected macro data. The probability of a 50bps cut has jumped to 59% from 30% last Monday. This is mirrored in increasing volatility, with Friday implied vols up 8 for BTC and 20 for ETH.

Trade Idea

With spot lower, skew is currently in favour of Puts. You can take advantage of this Put skew to optimize a bullish trade for Q4 at zero cost with an ERKO Seagull.

BTC Election ERKO Seagull

• Expiry: 8 NOV24
• Buy: 70k call with 100k knock-out
• Sell: 50k put
• Cost: ZERO
• Max payout: 413% p.a. or $30k per BTC if spot price is just below 100k level at expiry.
• Spot ref: 58,300