Analysts at QCP detect indications of Bitcoin hitting its lowest point as miners surrender
QCP, a trading company, has recently unveiled important developments in the cryptocurrency market. The drop in Bitcoin’s value below $59,000 indicates a strong selling pressure in the market, with QCP analysts suggesting that miner capitulation could signal a potential market bottom.
Keep reading to learn how you can take advantage of this situation.
QCP Highlights Signs of Miner Capitulation
Bitcoin (BTC) has fallen below the critical $60,000 support level, reaching a low of $57,875. QCP, in a communication on Telegram, pointed out that Bitcoin miners are displaying signs of capitulation, a trend historically associated with price bottoms, referencing a similar reduction in hash rate in 2022 when BTC dropped to $17,000.
Despite the market downturn, the options market remains positive, with a strong interest in Ethereum (ETH) call options for September and December expiries, indicating a bullish outlook for ETH.
What’s Driving the Bullish Momentum?
QCP analysts have identified several potential factors that could reverse the current downward trend. Both Bitcoin and Ethereum have significant liquidation clusters on the upside, which could lead to short squeezes and drive prices higher. Additionally, the anticipated approval of S-1 forms for ETH could result in a substantial increase in Ethereum prices.
Exploring Strategic Trading Ideas
QCP analysts have also proposed a strategic trading idea centered on ETH KIKOs (Knock-In, Knock-Out) to safeguard investors from potential losses. According to this trading strategy, investors would sell a 3k Put with a knock-in at 2.5k and buy a 3.6k Call with a knock-out at 5.5k, set to expire on 27 September 2024.
Furthermore, this strategy comes at no cost, with a maximum payout of 271.96% per annum or USD 1,900 per ETH if the spot price expires slightly below $5,500. However, if the spot price falls below $2,500 at expiry, investors would be obliged to purchase ETH at $3,000.
Expert Views on Miner Capitulation
Data from Coinglass shows that total crypto liquidations have surged by 114% in the past 24 hours, reaching $265 million, as the global market capitalization dropped to levels not seen in two months. Julio Moreno, head of research at CryptoQuant, highlighted that if prices do not show significant recovery during the summer, the market could witness miner capitulation as the hashprice continues to decline following the latest halving.
According to Ki Young Ju, CEO of CryptoQuant, miners may choose to capitulate or wait for Bitcoin’s price to surpass $58,000.
Tags: Bitcoin, Price Analysis