QCP Capital Insights on Bitcoin and Market Sentiment

Singapore-based trading and market-making firm QCP Capital estimates that risk assets, including Bitcoin, could be boosted as investor sentiment improves.

QCP Capital analysts noted, “Risk-on sentiment could extend to crypto and gold, pushing Bitcoin higher given the strong demand for topside calls.” The strong demand for Bitcoin call options indicates that derivatives traders expect the price to appreciate.

London-based trading firm Wintermute shared insights, stating that this risk-on sentiment arises from various factors. They mentioned, “An election year is upon us, and the economy shows promising signs of a soft landing. These elements converge to create a potentially favorable climate for investors, as evidenced by the S&P 500’s recent upward trajectory, laying the groundwork for renewed confidence across various asset classes, including Bitcoin.”

Traders Show Caution Ahead of U.S. Elections

However, QCP Capital’s Tuesday report indicated that derivatives traders are increasingly interested in Bitcoin put options as the U.S. presidential election approaches in November. This suggests they may be hedging against potential market volatility or a drop in Bitcoin prices around that time.

QCP Capital’s analysts also observed a noticeable difference in the expected volatility of options that expire before the election compared to those after, with a 6-point gap. They stated, “The put-call options skew is in favor of puts in the run-up to the U.S. election, with a steep 6-point volatility spread between pre-election and post-election expiries.”

In the last 24 hours, Bitcoin’s price rose over 4%, trading at approximately $60,758. The digital asset’s recent upward movement resulted in a rise in short liquidations, totaling over $62 million across centralized exchanges within that timeframe, out of a total of $85 million in liquidated Bitcoin positions, according to Coinglass data.