QCP Capital: “High risk of price drops for Ethereum”

If we can believe the analysts at QCP Capital, there is a chance that the Ethereum price will soon take a hit. According to the investment firm, more and more investors are choosing to open put options for Ethereum. They thus bet on price falls, which would protect any long positions.

What do you think? Is the market ready for a correction or will the Spot Bitcoin ETFs continue to drive new gains?

‘Risk Reversal’ upcoming for Ethereum

QCP Capital calls this development a so-called “risk reversal” and that would measure the extent to which the market thinks the ethereum price can change. If the risk reversal becomes negative, it would mean that more people are concerned about price falls.

At that time, people buy relatively more put options, with which they bet on falls in the price of Ethereum. This should then provide protection against their positions that focus on further increases in the number two position in the market.

People who invest in other altcoins would also buy put options on Ethereum, according to QCP Capital, to protect themselves against declines in their portfolio.

“This makes us vigilant for a possible correction, given the amount of leveraged positions in the market. However, we think the market will aggressively buy any dip,” QCP Capital said.

Major upgrade for Ethereum

The Ethereum network is now due for an important upgrade. The so-called Dencun upgrade is planned for today. The purpose of this software improvement is to make layer-2 blockchains cheaper.

Ethereum goes thru a MAJOR upgrade tomorrow.

L2s about to become cheaper & more useable. pic.twitter.com/4y10PINlSd

— Altcoin Daily (@AltcoinDailyio) March 13, 2024

In theory, this benefits the scalability of Ethereum. However, the question is whether that will solve the network’s problems. Since its launch, Ethereum is still looking for the “killer app” for the platform.

Decentralized financial applications have yet to experience their real breakthrough, which is why people are increasingly wondering whether they can deliver on their big promises.

Bitcoin has a clear application, namely protection against inflation. It remains to be seen what other decentralized networks have to offer the world.