Monday’s QCP Capital report highlighted two major events that could increase market volatility this week: the debate between presidential candidates Donald Trump and Kamala Harris, and the final reading of the U.S. consumer price index (CPI) ahead of the Federal Reserve’s rate decision on September 18.
“Crypto has stabilized after last week’s move, but implied volumes are still high, and it appears the market is still anticipating volatility heading into this week’s events,” QCP Capital analysts said.
Cryptocurrency market participants will be closely watching how both candidates perform in this week’s debate, as the outcome of the November U.S. presidential election could have significant ramifications for the industry, according to a Bernstein note published Monday.
If Republican candidate Donald Trump wins, Bernstein analysts expect bitcoin to reach new highs and reach near $80,000 to $90,000 by the end of the fourth quarter. On the other hand, if Vice President Kamala Harris wins, they predict bitcoin will break the current low of $50,000 and return to test the $30,000 to $40,000 range.
Derivatives traders position for further decline
Regarding derivatives market positioning, QCP Capital observed that traders remain cautious about further declines after major cryptocurrencies like bitcoin and ether fell by around 5% and 8%, respectively, over the past week.
“Risk reversals in the options market through October are still tilted toward bitcoin and ether puts,” they added.
Despite this caution, QCP Capital maintains a “structurally bullish sentiment” over the longer term. The firm noted that derivatives traders are taking advantage of existing market conditions to place longer-term bullish bets, including large purchases of March 2025 bitcoin call options with strike prices of $85,000, $100,000 and $120,000.
Analysts were also encouraged by bitcoin’s recent rebound, from $52,500 to around $55,500 over the past 24 hours.
“Some institutions seem to think we have reached a bottom and are taking this opportunity to reinforce their bullish bets in December and March,” they added.
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