QCP Capital, one of the first digital asset companies in Singapore, expressed optimism about the overall market sentiment, citing several factors that indicate a positive market outlook. It noted in a recent note that forward pips (the difference between the current exchange rate and the future exchange rate Expected) Bitcoin futures contracts recovered from their recent lows of 10% yesterday, meaning that traders were taking profits from their underlying trades by closing speculative positions on a decline in the price of Bitcoin. Therefore, there is a strong possibility that returns can exceed 15% when the right catalyst is in place.
Traders buy options contracts
Another positive factor QCP pointed to was the heavy buying of June 13 options contracts observed yesterday, coupled with a significant increase in the funding rate, indicating that the market is setting itself up for what QCP refers to as a “positive surprise,” meaning that market participants are anticipating positive developments that could lead to a significant upward move.
With stock markets hitting record closing highs for the second day in a row, QCP believes that the unchanged CPI reading and neutral outcome of the FOMC meeting could act as catalysts for the crypto market to retest its previous highs.
In light of these positive conditions, QCP offers a trading idea centered around Exotic Return Knockout options (ERKO), specifically the ERKO options for June 28, because the risk-to-reward ratio is considered good and the price is low.
The strike price of the ERKO contract is only $68,000 and the exit level is $75,000. If the price of Bitcoin is even slightly below $75,000 when the contract expires, the return could be as much as 5.6 times the initial investment.
On the other hand, the cost of one Bitcoin in the ERKO contract is estimated at only $1,250 based on the Bitcoin price of $67,800.
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