QCP Asia Colour - 4 July 24

- 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)