QCP Capital has recently released a new market analysis offering insight into what might be in store for the price of Bitcoin (BTC) — more importantly, which direction it could move next. These fresh insights particularly focus on the options market.
Market Anticipates Movement: Analyzing Bitcoin Options
The latest report from QCP Capital has identified an interesting pattern in the Bitcoin options market, highlighting a rise in front-end volatility specific to BTC. This increase by 5 points in short-term volatility indicates that traders are preparing for larger price swings over the next few weeks.
Additionally, the increasing number of topside risk reversals suggests growing expectations among traders that prices will likely continue to increase favorably, influencing market sentiment.
According to QCP Capital, this combination of higher implied volatility and attractive risk reversals sets the stage for a potential bullish price rally. The QCP analysts particularly noted:
Bitcoin front-end volatility increased by 5 points this morning, with risk reversals favoring the topside, signaling the market’s anticipation of potential topside volatility.
While Bitcoin has shown some signs of recovery as the market digests these fundamental analytical forecasts, volatility persists on the way up. Particularly, amid the gradual rebound, the asset still appears to be getting pulled by the bears.
Earlier today, BTC traded as high as $59,313; however, at the time of writing, the asset has now shredded most of its gains for today and is now trading at $57,766, a few dollars away from its 24-hour low of $57,127.
This continued volatility occurs against the backdrop of a broader financial market that is constantly changing, with a special focus now on the release of the Consumer Price Index (CPI). QCP noted:
With the perceived reduction in supply, a softer CPI print could serve as the catalyst to break out of this [current] range, especially bolstered by the upcoming launch of ETH spot ETF trading next week. We identify a compelling risk-reward opportunity on the upside through Digitals.
Long-Term BTC Holders Sentiment
Furthermore, regardless of all of these, the underlying confidence among Bitcoin’s long-term investors remains unshaken. According to the latest on-chain data from Glassnode, this cycle’s steepest price corrections are not even persuading these investors to sell.
Glassnode reported that despite several market blips, like Bitcoin dipping to as low as the $53,500 mark last week, long-term holders are as determined as ever and have not changed their aspirations in months.
The data suggests that only 36% or perhaps even less of the total Bitcoin capital has moved during this week’s sell-off events – substantially lower than past major market capitulations with over 60% involvement.
This data suggests solid behavior that supports a well-established underlying market structure even as BTC undergoes one of the toughest post-halving cycles ever.
Featured image created with DALL-E, Chart from TradingView