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Bitcoin enthusiasts were undoubtedly holding their breath as BTC tantalizingly approached the significant 36K mark. Just as expected, it brushed against the 38.2% Fibonacci retracement and the upper channel trendline before retreating. The anticipation and market chatter around this move were palpable.
Yet, if you thought this rally was all about the much-discussed spot ETF developments, think again. QCP Research suggests that this latest uptick was driven more by broader macro forces. The unexpected twist came from a reduced Treasury Q1 supply estimate and a dovish stance from the Federal Open Market Committee (FOMC), causing bond yields to plummet. This, in turn, sent risk assets, including Bitcoin, skyward.
Diving deeper, it remains uncertain whether this signals the beginning of a consistent upward trend in both global equity and bonds. While the rally was certainly a sight to behold for crypto investors, the macro backdrop has not fundamentally shifted. The correction seems more of a response to a highly bearish bond sentiment that perhaps was a tad overblown.
As the BTC spot price inches upward, there are notable shifts in the derivatives landscape. Perp funding, term forward, as illustrated in Chart 2, along with implied volatility and risk reversals shown in Chart 3, are hitting or maintaining high levels. Those betting on the surge implied by these derivatives are now eagerly awaiting the green light for the spot ETF.
Notably, with the announcement of earnings from giants like Coinbase and Apple on the horizon, along with the Non-Farm Payrolls (NFP) data release, the market is poised for potential volatility. These events could very well ignite the already heightened implied volatility and call premium.
However, it is essential to exercise caution and reflection. QCP Research emphasizes the critical role of spot ETF approval, signaling a significant upward trajectory for Bitcoin. On the flip side, a drastic move from Gensler could send us spiraling back to sub-32K levels.
Alex Dovbnya
Gamza Khanzadaev
