Despite a recent surge when Bitcoin rallied to $31.8k, the data on derivatives paints a different picture, suggesting BTC bears may in fact hold the reins. Despite requests for spot Bitcoin exchange-traded funds (ETF) sparking initial bullish enthusiasm, recent macroeconomic data is less than favourable for risk-on assets.
The July 14 Bitcoin weekly options expiry could signal a crucial shift in market attitudes, and we could see that all-important $30,000 support level crumbling in its wake. The $30,000 level is a threshold that the bears may seize as an opportunity to swoop in and make a profit of up to $120 million through the weekly option expiry.
This bearish prediction tallies with current U.S. inflation fall-outs. With the Consumer Price Index dipping to 3.0% in June, a record low since March 2021, this decrease in inflation levels may spell short-term trouble for Bitcoin. High interest rates could encourage investors to pivot into fixed-income investments, making Bitcoin less appealing by comparison.
On the upside, this reduction in inflation could be viewed as positive proof of the Fed’s effective intervening, thus strengthening Bitcoin’s bullish momentum. Unfortunately, this assumption was dashed when the U.S. Dollar Index bottomed out to a 14-month low on July 12. Wharton professor Jeremy Siegel postulates that it may be the depletion of consumer cash reserves that is contributing to this dip in investor confidence.
Many bullish hopes hinge on the potential approval of a spot ETF for Bitcoin, particularly to maintain Bitcoin’s trading price above $31,000 on July 14. Yet, recent statements from U.S. Securities and Exchange Commission (SEC) chair Gary Gensler have been less than encouraging, thus decreasing the odds of ETF approval.
Gensler has called out crypto exchanges for offering conflicting services, such as trading directly against their own clients. Furthermore, he has cautioned against the limited risk monitoring in place within crypto platforms, making them more susceptible to market manipulation.
The bears and bulls may be trading blows, but the fate of Bitcoin’s trading price on July 14 lies in the balance. Bears may flip the game by destabilising the $30,000 price support and bagging a $120 million profit at the upcoming weekly options expiry. However, the latest macroeconomic data backing further rate hikes and Gensler’s critique of exchange practices could hinder bears’ advances. In the high-stakes game of crypto trading, the final outcome remains uncertain.
Source: Cointelegraph
