In the week leading up to the release of the US Consumer Price Index on Tuesday, the cryptocurrency market saw a significant rebound. Bitcoin climbed above $122,000 at the weekend, and Ethereum rose by almost 20% to reach more than $4300.
QCP Capital’s gains are in line with an improved mood on US equity market. noting The correlation between Bitcoin and equity performance The trend has continued to strengthen since the middle of July. Digital assets’ total market cap also increased to $4.1 trillion on Monday.
Signs of inflationary trend are closely watched in the upcoming CPI. The consensus expects headline inflation to increase by 10 basis points over the past year, to reach 2.8%.
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QCP Capital noted that a lower reading might reinforce expectations of a Federal Reserve cut rate in September. higher-than-expected figure Could disrupt the rally of risk assets including cryptocurrency.
Analysts say that the market has prepared for both possible outcomes. The derivatives markets have been positioned to hedge on the downside but still leave room for positive momentum.
Warning: Market Data on Bitcoin and Ethereum Derivatives
The options market shows traders actively preparing themselves for the volatility that will surround CPI. QCP Capital highlighted demand for short-dated Bitcoin puts in the $115,000–$118,000 range, suggesting that some market participants are protecting against a potential price drop.
The continued covering of short calls indicates a reduced desire to wager against future gains. Bitcoin Options Aggregated open interest Close to $49 Billion, the peak reached in July.
After the CPI is released, implied volatility could decrease if Bitcoin does not break resistance levels.
Ethereum’s options are also very active, as open interest is at $13.9 Billion, which is the highest amount so far this year and near the record high set in march 2024 of $14.6Billion.
The increased interest shown in BTC as well as ETH indicates that traders are gaining a lot of confidence. heavily engaged CPI data is seen by many as an important catalyst in the short-term for pricing.
Inflows into Institutions: Long-Term Prospects
Analysts are focused on the institutional flow and market activity of spot ETFs. CoinShares data The data shows digital assets investment products received $571 millions in net flows last week. Bitcoin and Ethereum both saw gains.
QCP Capital stated that recent large sales by long-term investors have been absorbed without any change in the price trend, which indicates a resilient market structure.
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Analysts are still optimistic about the future despite the short-term uncertainties. Paul Howard is Senior Director of Wincent. reiterated his forecast Bitcoin prices could reach up to $150,000 by the year’s end, as per historical post-halving cycles.
Howard said that in the past, years after halving have been marked by significant price increases. He added that, while there might be periods of consolidation on the market, it is likely that higher prices will be achievable by 2025.
Chart created by TradingView, DALLE.
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Source: www.newsbtc.com
