QCP Capital: The Current Bitcoin Rally is Primarily Driven by Spot Funds, but Market Structure Remains Fragile

QCP Capital has released its latest market analysis, stating that BTC has broken out of the previous trading range of $82,500 to $85,700 that lasted for a week, reaching a high of $86,913 during the day, the highest since September 23. It is currently trading around $85,900, up 14.6% from the low of $74,968 on September 15. QCP points out that during this rally, the annualized funding rate for perpetual contracts was only 5.4%, indicating that the market is primarily driven by spot funds rather than leveraged trading. QCP believes that this rally diverges from traditional macro market signals. In September, the yield on the U.S. 30-year Treasury bond rose to 5.62%, and the 10-year yield reached 5.29%, while gold recorded its worst month of the year. Although rising real interest rates typically exert pressure on gold and risk assets, BTC continues to rise.

QCP believes that this market movement is more consistent with concentrated capital trading driven by institutional fund inflows, regulatory catalysts, and technical improvements, rather than a simple currency depreciation trading logic. Regarding institutional funds and regulatory factors, U.S. Bitcoin spot ETFs recorded net inflows of approximately $3.5 billion and $2.6 billion in August and September, respectively. QCP notes that the innovative exemption policy released by the U.S. SEC on September 17 provided a new regulatory catalyst for the market, but since the CLARITY Act failed to pass in the Senate, market structure legislation may be delayed until 2027. Therefore, current regulatory support comes more from the administrative level, and long-term policy certainty remains limited.

In the options market, yesterday's options trading had a nominal amount of about $2.5 billion, involving 54 trades with a nominal amount exceeding $5 million each. Among them, one client sold in batches call options expiring on October 30 with a strike price of $90,000, totaling over 4,000 contracts with a nominal amount of $346 million; at the same time, they actively bought call options with the same strike price expiring on November 27. QCP believes that this operation reflects that some traders are rolling their positions from October to November to position for the U.S. midterm elections, quarterly Treasury refinancing, and market volatility around the December Federal Reserve meeting.

On the macroeconomic front, the Federal Reserve will hold a monetary policy meeting from October 27 to 28. QCP states that after Federal Reserve official Williams indicated that there is no need to rush further policy adjustments and that the August core PCE was below expectations, market expectations for maintaining interest rates in October have warmed. However, the market still expects an approximately 80% probability of a 25 basis point rate hike in December. The U.S. non-farm payroll report for September, to be released tonight, will be an important short-term test, with the market expecting an increase in non-farm payrolls of between 84,000 and 93,000, an unemployment rate of 4.1%, and an average hourly wage growth rate of 3% year-on-year.

From a technical perspective, the support level of $82,500 has been tested three times in the past week, while $87,400 is the location of the September high and is a key resistance for BTC to further challenge the $90,000 mark. The implied volatility term structure in the options market is in a contango state, with a 7-day implied volatility of 30.3 and a 90-day implied volatility of 37.1; the 30-day risk reversal indicator is about -2.5 volatility points, indicating an increase in demand for short-term put protection. QCP believes that although BTC has shown resilience in the macro environment of rising real interest rates, the market is still primarily driven by capital flows and position changes, and it cannot be considered that macro risks have been eliminated. U.S. employment data, Treasury supply, and the upcoming series of policy events in the coming weeks may still trigger market volatility.

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