This week, the crypto market saw an intense reversal, invalidating the optimistic momentum ignited by the speech of Donald Trump. QCP Broadcast, the Telegram account of the famous Singaporean crypto trading platform QCP Capital, recently published an analysis report, saying that Bitcoin price has abruptly retraced to $60,000. This development has raised several concerns among investors and traders across the crypto sector. At present, the chief crypto token is changing hands at almost $61,610, down 4% in 24 hours.
QCP Publishes Weekend Bitcoin Analysis, Suggests a Reversal
In its report, the platform highlighted the possible reasons behind this correction. As per QCP Broadcast, a substantial spike in the BTC supply is one of the chief factors in this respect. the crypto market reportedly witnessed a flood of the Bitcoin supply just after the weekend. The respective influx took into account nearly 28,000 BTC that the US authorities released. In addition to this, it also included the distribution of up to 33,960 BTC that Mt. Gox made.
Moreover, the creditor distributions of Genesis also recorded ETH and BTC worth up to $1.5B. The respective releases played a crucial role in decreasing the price due to their sheer volume. The 2nd reason deals with the rise in mining difficulty, reaching the all-time high spot of 10.5%. This pushes miners to liquidate additional BTC to cope with the operational charges, putting extra pressure on the overall market.
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Furthermore, a higher-than-anticipated unemployment rate has additionally elevated the fears concerning a looming recession. The expected rate accounted for 4.1% unemployment while the current rate has touched 4.3%. The present bearish sentiment has flooded the crypto industry, as the VIX volatility index claims. It has crossed above 28, the highest level thereof since the local banking crisis seen in March last year.
The Platform Advises a Keen Observation and Use of Defensive Strategies
Apart from that, the options market has also mirrored this turmoil. In this respect, the risk reversals of Bitcoin have flipped from a bullish sentiment of +7% to -9% bearish trend. Irrespective of this operation, ETH and BTC volatilities expressed the least movement. QCP Boardcast asserted that the overall fluctuations in crypto prices might stabilize with progress in summer, irrespective of irregular price actions. The present market conditions will potentially lead to a prudent defensive strategy for the remaining portion of Q3. BTC Range Accrual is one such strategy, offering a huge coupon yield without any downside risk.