Key Points
- QCP Capital predicts that Bitcoin could reach $100K-$120K, citing post-US election price action and potential US Bitcoin Strategic Reserve.
- Large players selling call options and buying puts, indicating potential risks, could impact Bitcoin’s value.
QCP Capital, a prominent digital asset trading firm, has forecasted that Bitcoin could potentially surge to between $100K and $120K. This prediction is based on the strong price action observed after the US election and the potential establishment of a US Bitcoin Strategic Reserve.
“In light of Bitcoin’s impressive rally post-US election, we believe that $100,000-$120,000 may not be far off,” QCP Capital stated in its daily market update.
Short-Term Risks for Bitcoin
However, the firm pointed out that the increased selling of call options (bullish bets) and buying of puts (bearish bets) by large players could pose a risk. This suggests that large players are cashing out from their ‘Trump Trade’ bets and buying protective puts to hedge against a potential price pullback.
QCP Capital noted, “Implied volatility has been falling on the move up as many large players were positioned for it and sold calls into the rally. With each new high, our desk observed market is selling calls and buying puts to hedge their downside risk.”
This partly explains the recent price stalling above $93K and the subsequent pullback. At the time of writing, Bitcoin was valued at $88K, a roughly 6% decline from the latest all-time high.
Crypto-focused research firm, Presto Research, shared a similar sentiment to QCP Capital. The analysts noted slow demand from TradFi, citing a decline in MicroStrategy’s MSTR and Coinbase’s COIN as indications of the unwinding of the ‘Trump trade.’
“We’re at an all-time high, and some are unwinding the ‘Trump trade,’ which includes long Bitcoin positions…ETF inflows also show signs of a slowdown, although whether it’s a blip or a lasting trend remains to be seen,” Presto Research stated.
Data from Soso Value revealed that the US spot Bitcoin ETFs saw a daily net outflow of $400.67 million on Thursday.
Observations from the Bitcoin Options Market
Despite the risks, large players in the Bitcoin options market expect wild price swings on either side, with a predominantly bullish bias.
In the past 24 hours, changes in OI (Open Interest) rates or money inflows in call options were concentrated at $95K, $105K, $110K, and $120K targets. This suggests these levels as potential and immediate upside targets.
However, there was also significant OI in puts (downside bets) at $80K and $75K. These levels could act as support in case of an extended pullback.
Options expiries for the end of November and December remained arguably bullish. For instance, Deribit options for the December 27 expiry had a Put/Call ratio of 0.48, which was less than 1, indicating more calls (bullish bets) than puts (bearish bets), a bullish signal.
