We are now into the 8th week of a confused, rangy market that has been caught in 2 minds.

This lack of direction has led to an absolute crushing of implied volatility across asset classes.

VIX in particular has broken to new YTD lows, and is testing the 2022 lows that preceded the massive year-end spike in vol. The heavily correlated BTC DVOL has crashed to fresh cycle lows as well, although we are still some way from this being equal to YTD lows. 

Chart 1 – BTC DVOL: Yellow, Equity VIX: Blue, Bond MOVE: Orange

While gamma has been severely underperforming, with realized vol dragging implied vol lower, the upcoming 2 months of events makes vol a buy for us at these levels.

Gamma is also a buy. 1w BTC & ETH at 50 vols make little sense to us considering FOMC today, NFP on Fri and CPI next Wed. 

Furthermore, last night we got another timely reminder that the banking crisis is far from over – as we wrote about in our latest Just Crypto quarterly published last month. 

The ongoing banking crisis, and debt ceiling are 2 major narratives that we forsee will come to a head in the next 2 months.

As a result of these narratives we have flipped our position to be net long BTC and ETH, as shown in our trades update page at the end of the quarterly deck.

Also bullish for crypto are 2 charts which we published in our quarterly piece as well, and have updated here – the BTC halving cycle (Chart 2), and the March 2020 analog (Chart 3).

Chart 2

Chart 3

However, what is holding us back from breaking to new highs is the conflicting narrative of a hawkish Fed, continued strong employment and sticky inflation –  which will be updated in the next week.

Also holding us back is positioning in the USD, which we believe is heavily skewed to the short side.

In the spot market, we are sitting at crucial pivots for BTC and ETH to resume their uptrends.

ETH had a false breakout from its triangle, failing at the old support turned resistance of 2150, which needs to clear for the uptrend to regain momentum. This week however we have a weekly TD 9 sell, with spot sitting right at the upper triangle trendline (Chart 4).

Chart 4

BTC has to hold the very key 26,500 level, but we note the weekly RSI is already crossing below the trendline at 60, implying a fading of momentum. On the topside, the zone of heavy resistance between 30k and 32,500 remains the zone to clear for the uptrend to resume (Chart 5).

Chart 5

The biggest obstacle for crypto remains the USD – where we think the market is heavily positioned to the short side and vulnerable to a short squeeze, which could take BTC/ETH and Gold lower in response.

For the USD (DXY), the key level to the topside is 102.5, where we expect a break higher, to lead to a sharp correction lower in crypto. We note the positive divergence in RSI and MACD, and a potential double bottom at 101 (Chart 6).

Chart 6

We expect that after these 3 key events over the next 7 days, the focus of the market will quickly switch solely to the debt ceiling fight, and we will give a more detailed update on this next week. 

More from our Library


This information contained in this website is intended as a general introduction to QCP Capital and its activities as a Digital Payment Token (DPT) service provider and is for informational purposes only.

QCP Capital is not acting and does not purport to act in any way as an advisor or in a fiduciary capacity vis-a-vis any counterparty. Therefore, it is strongly suggested that any prospective counterparty obtain independent advice in relation to any trading investment, financial, legal, tax, accounting or regulatory issues discussed herein. This website is only directed at informed and qualified investors. Your entry to this website attests that you are fully aware that trading of DPTs is not suitable for the general public and that you are an informed and qualified investor, and are also fully cognisant of all technological and financial risk(s) associated with trading Digital Payment Tokens.

In the event you intend to onboard with QCP Capital to trade in DPTs, by onboarding with us you acknowledge that you are aware of any rules and/or regulations applicable to the provision of DPT and/or financial services, the high degree of risk involved and that in no event will QCP Capital or any if its directors or employees be liable for any injury loss, claim or damage (whether direct, indirect, consequential or incidental) arising either directly or indirectly out of, or in any way connected with, the site, or its use.

If you are located, incorporated, or otherwise established in, or a citizen or resident of certain jurisdictions, QCP Capital may be unable to, or otherwise reserve its right to refuse to engage in or establish a trading relationship with you. Please contact us if you believe you have received this notice in error. QCP Capital is not registered or licensed to operate in the states of Louisiana and New York and will not be able to establish a trading relationship with you if you are resident, incorporated or have your principal place of business in New York or Louisiana.

You also acknowledge that you understand that trading in payment token derivatives (“PTD”) are also not any less risky than trading in DPTs. PTD services are not regulated by the MAS and QCP Capital is as such not licensed under the MAS to provide PTD services. You should only trade in PTDs if you are an Accredited Investor and/or have sufficient experience and knowledge in trading PTDs.

Risk Warning on Digital Payment Digital Services

The Monetary Authority of Singapore (MAS) requires us to provide this risk warning to you as a customer of a digital payment token (DPT) service provider.

Before you pay your DPT service provider any money or DPT, you should be aware of the following. 

Your DPT service provider is an exempt payment services provider pending licensing under the Payment Services Act (2019) to provide DPT services. Please note that this does not mean you will be able to recover all the money or DPTs you paid to your DPT service provider if your DPT service provider’s business fails.

You should not transact in the DPT if you are not familiar with this DPT. This includes how the DPT is created, and how the DPT you intend to transact is transferred or held by your DPT service provider.

You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.

You should be aware that your DPT service provider, as part of its licence to provide DPT services, may offer services related to DPTs which are promoted as having a stable value, commonly known as “stablecoin”.