As uncertainty mounts in the crypto landscape, QCP Capital analysts note a growing inclination to mitigate the risk of a potential Ethereum (ETH) reversal.
Amid escalating tensions in the Middle East due to the Iran-Israeli conflict and a lackluster performance in U.S. stocks, traders are increasingly risk-averse, contributing to a pervasive sense of nervousness in the cryptocurrency sector. This sentiment is reflected in the negative funding for alternative contracts, indicating a depletion of long-term leverage.
While Bitcoin (BTC) continues to exhibit strong demand, particularly evident in its relatively stable perp funding and sustained double-digit yields in the back end of the curve, Ethereum faces more pronounced uncertainty.
“Perp funding for BTC is flattish with the back end of the curve holding steady at double digit yields,” noted QCP Capital analysts.
Given the current market dynamics, experts advise a cautious approach, recommending defensive bottom-picking strategies for acquiring BTC or ETH at a significant discount to the spot price.
The night of April 14 witnessed a notable downturn in Bitcoin’s price, triggered by news of Iran’s attack on Israel. The subsequent 8% drop below $62,000 marked Bitcoin’s most significant retreat since March 2023. Although the price has since recovered slightly, reaching $62,300 at publication, the event underscores the market’s susceptibility to geopolitical developments.
Despite the recent turbulence, QCP Capital previously expressed confidence in the forthcoming Bitcoin halving, which will reduce miners’ rewards for a mined Bitcoin block to 3.125 BTC. Anticipated factors driving growth include increased inflows into spot ETFs and reports of Citadel, Goldman Sachs, UBS, and Citi joining BlackRock’s exchange-traded fund. BlackRock’s role as a broker-dealer authorized to create and redeem shares of the ETF further bolsters optimism surrounding Bitcoin’s prospects.
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