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Markets remain tense as the world awaits Israel’s response to Iran’s missile strike on Tuesday. Crypto saw another selloff, with Bitcoin (BTC) dropping to $59,972 and Ethereum (ETH) falling below $2,400. BTC’s lower-low and lower-high suggest a short-term bearish outlook.

We believe this weakness is temporary, given the strong correlation between crypto and U.S. stocks. As U.S. equities recover, crypto is likely to follow. This correlation highlights that macroeconomic factors are currently the main drivers of risk asset prices.

With the ADP payroll report beating expectations, tomorrow’s non-farm payroll report will be key in confirming a strong U.S. labor market. A combination of expected rate cuts and labor strength could boost risk assets.

Trade Idea

Despite Middle Eastern tensions impacting Bitcoin during its historically strong month, we see this dip as temporary and expect the rally to prevail. We favor a Principal Protected Sharkfin strategy to capitalize on the expected bullish momentum.

BTC PRINCIPAL PROTECTED SHARKFIN

Maturity: 27DEC24

Strike: 75,000

Barrier: 88,000

Cost: Zero

Max Payout: 74.43% p.a. if spot expires just below 88,000 BTCUSD

(spot ref: 60,200)

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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.