Crypto Liquidations Could Spark Discount Trading: QCP
Highlights
- QCP Capital highlights a prevailing bearish trend in the market.
- Analysts suggest discount trading amid falling prices.
- Macro factors continue to spark crypto liquidations.
The ongoing crypto liquidations triggered by macroeconomic factors have led analysts and traders to pitch new techniques to weather the storm. A new market report from QCP Capital highlights the prevailing risky market sentiment due to recent outflows from crypto assets.
According to the release, nervousness on the part of traders could see a downside in Ethereum (ETH) risk reversal. Present values have lost 20% since the liquidation over the weekend with the asset’s price at $3,063. These bearish movements have sparked reduced sentiment plummeting ETH price from its previous highs.
QCP projects the market sentiment to remain with the Iran-Israel tensions which also plunged the stock market as investors withdrew funds from risky assets. US equities have also recorded weakness despite some factors.
“Perp funding for BTC is flattish with the back end of the curve holding steady at double-digit yields. Alt perp funding is generally negative as well which shows that a lot of the long leverage has been wiped out.”
QCP Suggests Discount Trading
With crypto liquidation plummeting the price of Bitcoin and Ethereum, QCP suggests picking bottoms carefully at a discount from the spot price.
“Given the prevailing nervousness, we suggest picking bottoms very defensively by buying BTC or ETH at a significant discount to the spot price. For example, a 12-week Accumulator to buy BTC at 55k (12% discount!).”
These market conditions led to crypto enthusiasts trending the catchphrase “buy the dip” across social media spaces. With the upcoming halving, several traders expect a reversal of present factors.
Crypto Liquidations to Continue?
While many expect a reversal of crypto prices, an analyst explained factors that could spark more corrections in Bitcoin price. The 30-day funding rate for Bitcoin remains high close to 2021 levels.
Also, the asset faces its greatest resistance with its all-time high. Retail inflow figures show reduced investors in the market amid its discount and premium levels.
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