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Yet another day of heavy selling pressure, causing BTC to fall below the 60k support level and reaching lows of 57,875.

BTC miners are showing signs of capitulation. Historically this has been associated with a bottom in prices with the last comparable hash rate drawdown occurring in 2022 when BTC traded to 17,000.

Despite the sell-off in crypto, the options market is still optimistic as we continue to see interest heavily skewed towards ETH Calls for Sep and Dec expiries.

What could cause prices to break this downtrend?

  1. Liquidation clusters on BTC and ETH are heavily skewed to the topside, opening up potential short squeezes.
  2. With S-1 Form approvals round the corner, an approval may result in a hard bounce in ETH.

Trade Idea

Given the recent sell pressure originating from BTC and driven by factors like Mt. Gox, miners, and government regulations, we believe ETH has the potential for a stronger rebound due to upcoming S-1 filings. An ETH KIKO helps you position for this rebound while providing downside protection.

ETH KIKOs (Knock-In, Knock-Out) Expiry: 27SEP24 Sell 3k Put (Knock-in: 2.5k) Buy 3.6k Call (Knock-out: 5.5k) Cost: ZERO Max payout: 271.96% pa or $1,900 USD per ETH if spot expires just below 5,500

Downside: At expiry, if spot is below 2,500, you buy ETH at 3,000 (Spot ref: 3,210)

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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.