Cryptocurrency analytics firm QCP Capital has noted a stark contrast between current market sentiment in stocks and the cryptocurrency sector.
QCP Capital recently observed that the equity market is showing “unusually optimistic” sentiment, with US stocks reaching record highs and Asian stocks largely in the green. This optimism is driven by expectations of an impending interest rate cut and a soft landing for the economy.
But QCP Capital noted that signs of nervousness persist, with the options market in particular pricing in a 1% swing in the S&P 500 in response to Fed Chair Powell’s upcoming Jackson Hole speech.
In contrast, the cryptocurrency market is experiencing a dramatic downtrend. QCP Capital noted that BTC recurring funding rates fell to -13% over the weekend, the lowest level since 2022.
QCP Capital also warned that the market may have overlooked the potential for the USD/JPY carry trade to unravel further. Bloomberg reports show funds like Vanguard have increased their forecasts for further rate hikes from the Bank of Japan (BOJ). QCP Capital suggests that could be a catalyst for another downward move in various markets.
Regarding the cryptocurrency market, QCP stated:
“We remain constructive and bullish heading into the year. One particularly encouraging factor is the resilience the market has shown this week to various ‘supply shock’ headlines for both Bitcoin and Ethereum.”
*This is not investment advice.
