Monday’s QCP Capital report highlighted two key events that could potentially cause market volatility this week: the presidential debate between Donald Trump and Kamala Harris and the final U.S. consumer price index (CPI) numbers before the Federal Reserve’s September 18 rate decision.
“Cryptocurrencies have stabilized since last week’s moves, but implied volatility remains high and the market appears to still be anticipating volatility heading into this week’s events,” QCP Capital analysts said.
Crypto market participants will be closely watching the two candidates’ moves in this week’s debate, as the outcome of the U.S. presidential election in November could have a significant impact on the cryptocurrency industry, according to a report released by Bernstein on Monday.
If Republican candidate Donald Trump wins, Bernstein analysts expect Bitcoin to recover to new highs and approach the $80,000 to $90,000 range by the end of Q4. However, if Vice President Kamala Harris wins, they predict Bitcoin will break the current $50,000 bottom and return to test the $30,000 to $40,000 range.
Derivatives market traders are bracing for further declines.
In terms of derivatives market positioning, QCP Capital observed that traders remain cautious about further declines after major cryptocurrencies such as Bitcoin and Ether fell by around 5% and 8% respectively last week.
They added that “the risk reversal in the options markets through October remains heavily weighted towards put positions for both bitcoin and ether.”
Despite these caveats, QCP Capital maintains a “structurally bullish sentiment” for the long term. The firm notes that derivatives traders are taking advantage of existing market conditions to make long-term bullish bets, including buying significant amounts of March 2025 Bitcoin call options with strike prices of $85,000, $100,000, and $120,000.
Analysts also viewed Bitcoin’s bounce from $52,500 to $55,500 over the past 24 hours as encouraging.
“Some institutions think we’ve hit bottom and are using this opportunity to add bullish bets for December and March,” they added.
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