QCP: Options Markets Indicate Bullish Shift Following Crypto Breakout

Crypto markets experienced a significant upward movement during early Asian trading after remaining stable throughout December. Bitcoin rose above $92,000, while Ether surpassed $3,100.

Key Takeaways:

Bitcoin and Ether have broken out of their December trading ranges as global markets shift to a risk-on sentiment.
QCP indicates this could signal a fundamental shift in the market, helped by the easing of tax-loss selling and new policy options.
Options markets are becoming more favorable, although traders are still cautious even as upside demand increases.

This surge coincided with stronger global equities and declining oil prices, suggesting a renewed risk appetite as the year begins, according to QCP’s recent Asia Colour report.

QCP: Options Markets Signal Bullish Shift After Crypto Breakout

Rally Indicates Possible Market Shift as Risk Appetite Grows

QCP suggests this rally represents a substantial shift in the market rather than a temporary rebound.

The diminishing impact of year-end tax-loss selling has alleviated a significant barrier to price increases, while renewed interest in policy options has captured investors' attention.

In this environment, the recent strength in crypto assets aligns more closely with traditional risk assets compared to late last year.

Additionally, geopolitical events contributed to this trend. Market reactions included news about a recent US special forces operation leading to the arrest of Venezuelan President Nicolás Maduro, who is now expected to face consequences in the US.

QCP pointed out that lower oil prices could introduce a disinflationary effect, and speculation about seized digital assets has spurred discussions about a potential “shadow” Bitcoin reserve.

While QCP suggests caution regarding such claims, they do echo a growing interest among sovereign entities in holding cryptocurrency.

Supportive Trends in Derivatives Markets

The derivatives markets appear to be more supportive of the recent price movements. QCP noted a compression in put skew, indicating a decreased demand for downside risk, with increasing interest in longer-term bullish positions, such as January 2026 $100,000 Bitcoin call options.

Moreover, demand for topside structures like straddles has also been on the rise. Nevertheless, QCP cautions that traders should remain prudent in their positioning.

“A continued steady climb may increase the likelihood of a gamma-assisted price increase, although recent trading sessions in the U.S. have often dampened rallies, keeping traders cautious,” said QCP.

Increased Whale Inflows to Binance as Buying Power Stabilizes

In a notable shift, major cryptocurrency investors transferred approximately $2.4 billion worth of Bitcoin and Ether to Binance over the past week, marking the exchange's highest net inflow in about a month.

On-chain data from CryptoOnchain indicates that the deposits were nearly evenly divided between the two cryptocurrencies, a behavior often seen when preparing to sell or using assets as collateral for derivatives trading.

Analysts identified a critical imbalance associated with these inflows. Movements in stablecoins remained relatively unchanged at around $42 million for the week, with most activity reflecting transfers between different blockchains rather than new investments entering the market.

Meanwhile, Abra's CEO Bill Barhydt has expressed optimism that Bitcoin may thrive in 2026 as easing monetary policies inject fresh liquidity into markets, thus reviving risk appetite after a long period of tight financial conditions.

Barhydt observed that the US central bank seems to be setting the stage for a more relaxed policy environment. He mentioned early indications of renewed balance sheet support, characterizing the current situation as “quantitative easing light,” as the Federal Reserve steps in to bolster demand for government debt.