According to BlockBeats news, on August 11, QCP released its daily market observation stating, 'During the low liquidity weekend period, the cryptocurrency market rebounded strongly, with Bitcoin breaking through $122,000, approaching historical highs, completely recovering last week's losses. Ethereum performed notably well, rising 21% over the past seven days and breaking through $4,300 for the first time, setting a new high since 2021.'
Since mid-July, the correlation between Bitcoin and the stock market has significantly increased, so today's outperformance of the cryptocurrency market aligns with the overall trend of rising risk appetite. The U.S. stock market rebounded last week after a brief pullback following the employment data release, nearing historical highs, almost ignoring the impact of new tariffs and macroeconomic uncertainties.
With strong bullish momentum, the market's short-term focus has shifted to the U.S. Consumer Price Index (CPI) to be released on Tuesday. The market generally expects the annual inflation rate to rise by 10 basis points to 2.8%. If the data is below expectations, it could further solidify market expectations for a rate cut by the Federal Reserve in September, especially after several Fed officials recently shifted from hawkish to dovish, making a rate cut almost a certainty. Whether this can drive cryptocurrency assets to new highs remains to be seen.
Conversely, if the CPI data is on the high side, the upward momentum may pause, and the cryptocurrency market will also consolidate along with the broader market. To this end, some traders are beginning to hedge against event risks, with increased demand for Bitcoin put options in the $115,000 to $118,000 range to guard against unexpected downturns. Such defensive actions exist alongside the buying back of call options at the top. It is expected that front-end volatility will remain high before the data is released, and if Bitcoin fails to effectively break through resistance, volatility may narrow.
As Bitcoin approaches historical highs, institutional demand and the inflow of spot ETF funds will become focal points. The price is at a key resistance range, and some profit-taking may occur before the CPI release. However, the market has recently successfully absorbed the selling pressure from 'old whales' without losing momentum, further supporting our structurally bullish judgment.
