QCP Capital: Jump Trading and Paradigm’s aggressive selling may be the trigger for this ETH decline

QCP Capital's latest report points out that panic selling and liquidation in early Asian trading caused BTC and ETH to fall to lows of $49,000 and $2,116, respectively. The direct trigger for the decline was the aggressive ETH selling by Jump Trading and Paradigm VC, which caused the front-end ETH volatility to surge by more than 30% to 120%, exacerbated by market makers' eagerness to cut gamma positions in short-term options. In addition, last Friday's poor US employment data, the deterioration of macro sentiment, and the large-scale liquidation of various assets led to a sharp increase in market volatility. The VIX index hit 50 (only higher during the COVID-19 pandemic and the 2008 financial crisis), while the 1-month at-the-money volatility of the US dollar against the yen soared to 16%, which further triggered liquidations. Global risk sentiment was also exacerbated by Israel's killing of Hamas leaders over the weekend, Iran vowed to take action, and the United States began to deploy troops to the Middle East. In terms of trading suggestions, despite the market turmoil, forward basis and funding rates performed well.