QCP: Geopolitical risks and macro uncertainty boost volatility in the crypto market

Deep Tide TechFlow message. On July 13, QCP released its latest report stating that although the U.S. and Iran appeared to cool off temporarily after signing a memorandum of understanding, recent military clashes between the two sides and mutual accusations have once again put pressure on the ceasefire outlook, with substantial uncertainty still remaining in the geopolitical situation. Oil prices are currently holding at around $70 per barrel. The market’s reaction is relatively restrained, but if the supply rebound falls short of expectations, oil prices still face upside risk.

In the crypto market, both Bitcoin and Ethereum are hovering near key support levels. Demand for downside protection is increasing, driving implied volatility to keep rising, especially as July-expiring Bitcoin $55,000 to $58,000 put options see heightened trading activity. Meanwhile, ongoing concerns surrounding MicroStrategy, outflows from Bitcoin spot ETFs, and pressure on U.S. equities amid crowded AI trading have also weighed on market sentiment.

However, the market is not entirely bearish. Over the weekend, there were also large buy orders for Bitcoin call options expiring on July 17 with a strike price of $64,000, indicating that some traders are still positioning for short-term rebound opportunities as prices move closer to the lower end of the range.

On the macro front, at the start of July, Federal Reserve Chair Kevin Wa will deliver remarks at the European Central Bank forum, and the market will focus on how he describes the policy path. In addition, this week will also see the release of the ISM Manufacturing PMI and U.S. nonfarm employment data. Against the backdrop of thinner liquidity due to U.S. holidays, market volatility may be further amplified.