Trading firm QCP Capital has released a new report that analyzes the current situation in the cryptocurrency market and offers trading strategies in the face of geopolitical tensions.

According to the report, markets remain tense ahead of Israel’s response to Iran’s missile strike on Tuesday. The crypto sector responded with another sell-off, with Bitcoin falling to $59,972 and Ethereum slipping below $2,400. BTC’s pattern of lower lows and lower highs suggests a short-term bearish trend.

However, analysts at QCP Capital believe that this weakness is temporary. They note a strong correlation between cryptocurrencies and the US stock market. As US stocks recover, cryptocurrencies are likely to follow. This relationship highlights that macroeconomic factors are currently the main drivers of risk asset prices.

Key influencing factors

The Automatic Data Processing (ADP) U.S. employment report beat expectations, making tomorrow's nonfarm payrolls report a key indicator of the strength of the U.S. labor market. The combination of expected interest rate cuts and a strong labor market could provide a boost to risk assets.

Trading strategy from QCP Capital

Despite the impact of Middle East tensions on Bitcoin in a historically strong month, QCP analysts view the current decline as temporary and expect an “Uptober” rally to still take place. They suggest the Principal Protected Sharkfin strategy to capitalize on the expected bullish momentum.

Let's look at the essence of this strategy:

  • Principal Protected means that the investor will not lose his initial capital even if the market goes against him.

  • Sharkfin is a type of options strategy that gets its name from the shape of the payout graph, which resembles a shark's fin.

  • The strategy uses a combination of options to create a payoff structure that provides capital protection and the potential for profit within a certain price range.

  • The investor receives maximum profit if the price of the asset (in this case Bitcoin) ends the period just below a certain level (barrier).

Here are the parameters of the proposed strategy:

  • Asset: BTC

  • Expiry date: December 27, 2024

  • Strike: $75,000

  • Barrier: $88,000

  • Cost: Zero (free to enter)

  • Maximum payout: 74.43% per annum if spot price ends just below $88,000

  • Current Bitcoin Price: $60,200

This strategy allows investors to make a significant profit if the price of Bitcoin rises to just below $88,000 by the end of December 2024, without risking their initial capital. However, it is important to remember that the maximum profit is limited, and if the price of Bitcoin exceeds the $88,000 barrier, the returns may decrease.

It is worth noting that in the previous report on October 2, QCP Capital proposed a different strategy - BTC Win-Range (Top Side) with a 9x payout if BTC consolidates in the range of $90,000 to $110,000 by December 27, 2024. The change in proposed strategies reflects the dynamics of market sentiment and the expectations of the firm's analysts.$BTC $ETH $SOL #ЛюбимыйТокен