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US came to the rescue again overnight, providing much needed support and liquidity to a panicking market. This was especially felt in crypto with strong spot buying on Coinbase orderbooks. By the end of the US session, BTC recovered to $56,000 and ETH to $2,500.

Macro markets rebounded hard today with Japan’s stock market up 9% today after a 12% drop yesterday. US futures also signal a potential rebound following US ISM data showing service sector expansion in July.

Has normalcy returned?

It is definitely too soon to say. While the VIX has fallen from its peak of over 65 yesterday, it remains above 30. Asset prices are likely to stay volatile and markets remain choppy until clarity on Fed and BoJ policy is provided, with key updates expected from BoJ Deputy Governor Uchida on Wednesday and the Fed’s Jackson Hole conference from August 22-24.

Chatters of an emergency rate cut…

We believe it is unlikely, as it would seriously undermine the Fed’s credibility and reinforce market panic, feeding into the belief of an impending recession.

Trade Idea

Yesterday’s risk-off rout flushed out a decent chunk of leverage. With prices having fallen off a cliff, it is possibly time to start thinking about accumulating BTC and ETH spot.

BTC Accumulator

Buy BTC spot at 9.8% discount (49,800) every week as long as spot is below 60,000.

  • Maturity: 11OCT24 (10 weeks)
  • Strike: 49,800 (-9.8%)
  • Upper Barrier: 60,000 (+8.7%)
  • Observation Frequency: Weekly

(Spot Ref: 55,200 BTCUSD)

ETH Accumulator

Buy ETH spot at 10.5% discount (2,200) every week as long as spot is below 2,850.

  • Maturity: 11OCT24 (10 weeks)
  • Strike: 2,200 (-10.5%)
  • Upper Barrier: 2,850 (+15.9%)
  • Observation Frequency: Weekly

(Spot Ref: 2,460 ETHUSD)

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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.