Weekend Brief

BTC finally got the recovery that we’ve been waiting for. It seems Powell’s speech at Jackson Hole was the catalyst it needed to breakout of the 58k-62k range.

Rate cuts are confirmed for Sep but there was no indication on how much, so August Payrolls will be critical. A 25bp cut is likely to be bullish, while a 50bp cut could indicate the Fed is taking acute action to prevent the economy from falling flat.

Last night’s rally was mostly spot driven as funding continues to remain flat. However, we should expect an increase in leverage long positions if the 62k support holds and as we approach the end of summer holidays.

On the options desk, we saw increased topside positioning. Around 600x of Monday 62.5k-63k Calls, which are now in-the-money, were bought just before Powell’s speech. Even on the backend, bulls continue to pile on to their long bets in Dec and Mar (80k to 85k strikes).

So where do we go from here?

BTC is back comfortably in the familiar 61k to 70k range, selling supply is slowly depleting and spot ETF saw net inflows in 10 of the last 12 days. Similar to last night, it does seem crypto is looking for a narrative to breakout of this multi-month bullish flag.

Despite the significance of next week’s Nvidia earnings and even the September rate cut, we believe spot will continue to chop around this range until Q4. We maintain the view that the US elections accompanied with bullish seasonality could be the catalyst for all-time-highs.

Trade Ideas

BTC ACCUMULATOR

If you’re like us and think BTC continues to trade around this 61k-70k range before the big breakout heading into the US elections (5 Nov), you can accumulate BTC spot at 9.1% discount (58,200) every week as long as spot is below 70,000.

• Maturity: 1NOV24 (10 weeks)
• Strike: 58,200 (-9.1%)
• Upper Barrier: 70,000 (+9.4%)
• Observation Frequency: Weekly
• Spot Ref: 64,000

PRINCIPAL PROTECTED BTC RANGE ACCRUAL

With Basis still below 10% pa, generate 17% pa yield while BTC continues to trade around this 61k-70k range.

• Coupon Rate: 17% pa in USD if BTC/USD fixes at-or-within the range 61k to 70k, 0% otherwise
• Maturity: 8NOV24
• Coupon Frequency: Weekly from 30AUG24
• Full redemption 100% in USDC at maturity
• Spot Ref: 64,000