As a seasoned crypto investor with a few years under my belt, I’ve seen my fair share of market fluctuations and trends. The recent analysis by QCP Capital piqued my interest as it sheds light on the current state of Bitcoin and Ethereum markets.
Based on their analysis, QCP Capital, a cryptocurrency trading firm situated in Singapore, anticipates a subdued summer season for the crypto market. They attribute this prediction to the absence of significant triggers capable of causing substantial price fluctuations in the market.
On June 14, QCP shared an analysis via their Telegram channel, indicating that Bitcoin‘s recovery after the Federal Open Market Committee (FOMC) meeting has been challenging, despite a robust performance in equities. They attributed this to miners giving up on Bitcoin mining following the recent halving event.
Miner Capitulation
As an analyst, I’ve observed that the recent halving event, which decreased block rewards from 6.25 Bitcoins to 3.125 Bitcoins, has significantly impacted miners’ profits. Consequently, many miners are being forced to sell their Bitcoin holdings in response to this financial strain. This phenomenon is referred to as miner capitulation, and it often results in a downward trend for Bitcoin prices due to the increased supply on the market.
The significance of the issue is highlighted by a considerable drop in the mining network’s hash rate, indicating that less productive miners are leaving the market due to reduced profitability. It’s worth mentioning, though, that the surviving miners tend to become more profitable as the network’s difficulty adjusts. According to Blockchain.com, the mining network’s hash rate fell from 657 EH/s on May 27 to 586 EH/s.
As a researcher investigating the current state of the cryptocurrency market, I’d like to bring your attention to an ongoing development that could add complexity to the situation. FlowBank, a Swiss financial institution engaged in a triparty agreement with crypto exchange Binance, is now undergoing bankruptcy proceedings. According to the Swiss Financial Market Supervisory Authority (FINMA), this bank has severely violated the necessary operational standards for banking and lacks the minimum capital required to sustain its business activities.
No Immediate Movement for Ether: QCP Capital
At present, Ethereum offers a promising trading prospect based on the findings of the analysis. However, according to QCP Capital’s latest assessment, we can expect minimal price fluctuations in the near future for Ethereum.
As a crypto investor, I’m excited about the possibility of the Securities and Exchange Commission (SEC) approving a spot Ethereum exchange-traded fund (ETF) by late summer, according to SEC Chair Gary Gensler’s anticipation. This approval could serve as a major catalyst for Ethereum’s price appreciation in the future. In light of this, I recommend traders consider accumulating Ether during this quiet summer season while its value remains under $4,070, as suggested by QCP’s report.
It’s an optimal moment to initiate ETH trades for the purpose of stockpiling, given that Ethereum options currently have a volume premium of around 10% compared to Bitcoin.
The anticipated approval of the S-1 Form later this summer is likely to bring back more Ether overwriters to the market, thereby reducing the spread between buy and sell prices for this asset as expected by QCP.
Significantly, in May, the SEC gave its green light to 19b-4 applications for Ether-based spot ETFs from notable firms such as Grayscale, BlackRock, Fidelity, Bitwise, ARK 21Shares, VanEck, Franklin Templeton, and Invesco Galaxy. These financial heavyweights are now preparing to submit their S-1 Forms for final approval from the regulatory body.
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2024-06-14 16:28