QCP Capital: Bitcoin is consolidating at the monthly low range, it is expected that there will not be significant fluctuations during the New Year period

Singaporean cryptocurrency investment firm QCP Capital announced today that, as expected, we witnessed the typical volatility sell-off after the end of quarter options expiration. Since Friday's record-setting option expiry, volatility has dropped by 2-3 points.

Despite Bitcoin consolidating near the bottom of its one-month trading range and maintaining a flat return this month, both Bitcoin and Ethereum performed quite well in the fourth quarter: Bitcoin rose by 48%, while Ethereum increased by 30%. However, it may be too early to summarize this quarter. Just yesterday, Saylor released his Bitcoin purchase tracker again which could indicate another round of purchases is imminent to further support prices.

Although there might be another round of buying, we are skeptical about significant fluctuations during the New Year period especially considering good capital conditions. The average return rate in January (+3.3%) is relatively close to December (+4.8%), so we can expect spot prices will remain within this range before rebounding in February.

Option trading flow also reflects similar sentiment with front-end volatility gradually decreasing while March call options have most risk reversal quotes partly due to large amounts of bullish options (120k-130k) expiring in March being purchased last Friday.