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QCP Capital: Trump's cryptocurrency reserve plan triggers market volatility, trade tensions escalate risk asset pullback

ChainCatcher news, QCP Capital's latest analysis points out that the brief market rebound following Trump's announcement of a cryptocurrency reserve plan on Truth Social on Sunday quickly faded, with risk assets generally pulling back and erasing most of Sunday’s gains. Trump's renewed push for tariffs on Canada, Mexico, and China intensified the sell-off, reinforcing investors' concerns about escalating trade tensions.The analysis indicates that the unexpected inclusion of XRP, SOL, and ADA tokens in the reserve plan has sparked divisions within the crypto community, with initial optimism about the project's advantages shifting to a more in-depth examination. Current doubts mainly focus on potential contradictions between the plan and DOGE cost-cutting measures, as well as the lack of transparency regarding the sources of reserve funds.QCP Capital states that this market decline may exacerbate the pressure Trump faces, especially after receiving strong support and donations from the crypto community during his campaign. Even the U.S. Securities and Exchange Commission (SEC) suspending and withdrawing enforcement cases against crypto companies has failed to stop the market sell-off, highlighting a broader risk-averse sentiment.The report notes that after a month of low cross-asset volatility, market anxiety has resurfaced due to the prospect of tariff confrontations potentially suppressing global growth. This shift is reflected in the 10-year U.S. Treasury yield dropping 50 basis points over the past two weeks, the VIX surpassing 22, and Bitcoin's short-term volatility sharply rising by 8 points since the weekend, with a significant skew towards bearish options.Previous news, Trump's launch of a cryptocurrency strategic reserve may be aimed at boosting approval ratings, with the market focusing on Friday's White House cryptocurrency summit.

Greeks.live: Both Bitcoin and Ethereum options Skew remain positive, with whales significantly increasing their long positions in call options during the pullback

ChainCatcher message, Greeks.live analyst Adam posted on social media, "Since February, the market has been in a noticeable correction, with BTC once dropping to $91,000, and ETH experiencing a larger decline, falling to $2,100, setting a new low for 2024. Altcoins have seen even more severe drops, with many altcoins losing 50% in a single day.During the most intense downturn, the short-term options IV for ETH broke above 110%, with major expirations also rising above 70%, and it remains at a high level. BTC, due to a more moderate decline, saw its short-term options IV rise to 65%, but as it recovered the $100,000 mark, the major expirations IV fell back to pre-crash levels.The market is now showing a clear divergence, with BTC being strongly supported by both insiders and outsiders in the crypto space. In contrast, funds represented by ETH and other altcoins are rapidly flowing out, and the prices of most cryptocurrencies have significantly shrunk, with the anticipated altcoin season yet to arrive.From the options data, it can be seen that the Skew for both BTC and ETH remains positive, and whales are accumulating a large number of call options during the correction, indicating that the market is still optimistic about the future. The brief correction has shaken market confidence, but the future of cryptocurrency is bright."

Data: The cryptocurrency market sector has risen for three consecutive days, with the PayFi sector leading the way at 6.99%, while the DeFAI and AI Agents sectors are experiencing a pullback

ChainCatcher message indicates that, according to SoSoValue data, the encrypted market sector has risen for three consecutive days, with the PayFi sector showing a 24H increase of 6.99%. Within this sector, the leading projects XRP (XRP) rose by 8.34%, and LTC (Litecoin) increased by 8.57%. Additionally, the Layer 1 and DeFi sectors performed well today, with 24H increases of 3.97% and 3.82%, respectively.In the Layer 1 sector, SOL (Solana) rose by 5.66%, and ADA (Cardano) increased by 6.50%. The DeFi sector saw a 3.82% increase, with LINK (Chainlink) rising by 9.98%, XDC (XDC Network) increasing by 8.93%, and AERO (Aerodrome Finance) up by 8.26%.It is noteworthy that the popular sector DeFAI experienced a correction, with a 24H decrease of 7.18%. Within this sector, GRIFFAIN fell by 8.07%, and GRIFT dropped by 5.26%. After consecutive large increases, AI Agents also faced a correction, with a 24H decrease of 3.84%. Among them, the Virtuals Protocol ecosystem tokens saw the largest declines, with VIRTUAL, AIXBT, and GAME dropping by 4.89%, 6.05%, and 12.08%, respectively, while FARTCOIN (Fartcoin) rose against the trend by 21.55%.In other sectors, the Meme sector had a 24H increase of 1.52%, the Layer 2 sector rose by 1.33%, and the CeFi sector increased by 0.68%.
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