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Market analysis firm QCP Capital reported in its latest assessment that global markets remain cautious due to geopolitical tensions in the Middle East.
QCP: Markets Cautious as Middle East Tensions Continue, Crypto Downside Hedging Increases
According to the report, gold prices have retreated while oil has stabilized around $75. However, uncertainty continues in the cryptocurrency market.
According to QCP data, Bitcoin (BTC) is trading sideways despite macroeconomic uncertainties. However, an increase in downside risk protection strategies in crypto derivatives markets is noteworthy.
Risk reversal structures for both BTC and Ethereum (ETH) suggest that investors are opting for more put options, suggesting that the market is concerned about a possible downside move.
On the other hand, the narrowing of Ethereum’s short-term volatility premium (front-end vol) may indicate that investors feel less need to hedge in the near term, suggesting that the expectation of excessive volatility is decreasing despite the general uncertainty in the market.
QCP Capital emphasized that a decisive catalyst is needed to break out of the current sideways trend. The firm stated that significant macroeconomic developments or political surprises could have the effect of reorienting the market.
*This is not investment advice.