News, Price Analysis

QCP Analysts See Signs of Bitcoin Bottom as Miners Capitulate

QCP, a trading firm, revealed significant developments in the cryptocurrency market. Bitcoin’s recent dip below $59,000 underscores the heavy selling pressure in the market, with QCP analysts noting miner capitulation as a potential indicator of a market bottom. 

Read on to know how you can profit from it.

QCP Highlights Signs of Capitulation

Bitcoin (BTC) has dropped below the crucial $60,000 support level, hitting lows of $57,875. QCP, in a message on Telegram, highlighted that Bitcoin miners are showing “signs of capitulation,” historically linked to price bottoms, referencing a similar hash rate drawdown in 2022 when BTC fell to $17,000.

Despite the sell-off, the options market remains optimistic, with interest heavily skewed towards Ethereum (ETH) call options for September and December expiries, indicating bullish sentiment for ETH. 

What’s Fueling the Bullish Trend?

QCP analysts pointed out several potential factors that could reverse the current downtrend. 

Both Bitcoin and Ethereum have substantial liquidation clusters on the top side, which could trigger short squeezes and push prices higher. Plus, the upcoming approval of S-1 forms for ETH could trigger a significant bounce in Ethereum prices.

Analysing Strategic Trade Ideas

QCP analysts also proposed a strategic trade idea focusing on ETH KIKOs (Knock-In, Knock-Out) to protect investors from the downside. According to this trading method, selling a 3k Put with a knock-in at 2.5k and buying a 3.6k Call with a knock-out at 5.5k, all set to expire on 27 September 2024. 

Moreover, the cost of this strategy is zero, with a maximum payout of 271.96% per annum or USD 1,900 per ETH if the spot price expires just below $5,500. But, if the spot price falls below $2,500 at expiry, investors would be required to buy ETH at $3,000.

Expert Opinions on Miner Capitulation

Data from Coinglass reveals that total crypto liquidations have surged by 114% in the past 24 hours, reaching $265 million, as the global market capitalization plunged to two-month lows. CryptoQuant head of research Julio Moreno noted that if prices do not recover significantly during the summer, the market is likely to see miner capitulation, as the hashprice (average miner revenue per hash) continues to make new lows following the latest halving.

According to CryptoQuant CEO Ki Young Ju, miners can capitulate or wait for Bitcoin’s price to soar above $58,000.

SOURCE

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