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  • Spot has recovered most of Friday's losses, with the 5% drop in BTC to 60k on Friday triggered by hawkish Fed comments.
  • We think price action could chop around here as the market digests fundamentals from the several macro events lined up this week:
    • Tue: US PPI, Powell to speak
    • Wed: CPI, Retail Sales
    • Thu: Unemployment Claims
  • Given the strong bounce from last week's lows, 60k still seems like a strong support level barring any hawkish surprises (BTC risk reversals are at neutral levels).
  • Overall, the desk still remains structurally bullish BTC even as spot continues to consolidate here while the market gets more clarity from the Fed.
  • Options flows today saw buyers of BTC Jun topside (65k) and BTC Dec topside (90k-100k strikes).

Trade Idea:

With Spot-Forward Basis yields still in the single digits, you can still generate decent >20% yields from UFCCs (Unconditional Fixed Coupon Convertible). Indicative example below:

BTC UFCC (USD deployment)

(spot ref: 63,000)

Earn a weekly coupon of 22%pa.

At expiry, as long as BTC spot is above 50k, 100% of the principal is returned.

If BTC spot is below 50k at expiry, you will buy BTC at 55k level.

Maturity: 12JUL24 (8 weeks) Strike: 55,000 Protection Level: 50,000 Coupon Rate: 22% p.a.

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Disclosure: The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.