While a correlation between equities and crypto has become more apparent during the last year, Singapore’s QCP wrote that there is a limit to this correlation because of the increasing importance of the crypto options market.

  • As the bitcoin and ether markets followed the bearish sentiment of the equities market as the week began, bitcoin and ether tumbled below $40,000 and $3,000 respectively.

  • QCP wrote that they believe there was a bounce-back because of the number of strikes at the $40,000 mark for bitcoin, and the $3,000 mark for ether, held by whales.

  • The fund noted that there was a counterparty that was buying a large amount of downside risk reversals (where a trader buys the put and sells the call) who suddenly switched positions to take profit (where they sell the put and buy the call).

  • With the volume of delta trading (simultaneously buying and selling options) on the strikes at $40,000 and $3,000, there was a creation of spot support at those levels, QCP wrote.

  • QCP said that one reason why bitcoin is facing some resistance at the $44,000 market is that a whale began taking profit on his $42,000 January calls as bitcoin drifted towards $44,000.

  • “We think option activity will increasingly dictate spot movements as the options market continues to grow,” the firm wrote.

All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Shiba Inu price to erase half of the losses incurred and tag $0.000028

Shiba Inu (SHIB) has shed around 40% of its value due to concerns in global markets about the FED rate decision this evening against a background of geopolitical turmoil.

More Shiba Inu News

XRP presents buying opportunity before breakout to $1

XRP continues to test a new support zone in the $0.60 value area. Bottom likely in for XRP, relief rally, or trend change incoming. The Point and Figure chart shows a bullish entry opportunity.

More Ripple News

Cardano primed for relief rally towards $2.20

A brief technical and on-chain analysis on Cardano price. FXStreet's analysts evaluate why ADA could rebound swiftly. 

More Cardano News

IMF pushes El Salvador to drop Bitcoin as legal tender

The International Monetary Fund (IMF) has told El Salvador to remove Bitcoin’s status as legal tender. The IMF directors stated the move was due to concerns around financial stability, integrity and consumer protection.

More Cryptocurrencies News

Bitcoin: BTC may capitulate to $30,000

Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

Read full analysis

BTC

ETH

XRP