As Friday nears, the crypto-market is exhibiting episodes of suspense and anticipation. The Bitcoin options’ expiry on Friday could reinforce the $30,000 resistance level, handing over the control reins to the bears. The recent price action of Bitcoin reveals significant price movements coinciding with three out of the last four Bitcoin options’ expiries. Does this imply causation, or is it a mere correlation? Many market players exhibit a high level of caution leading up to the weekly expiries.
While the bears stand a chance to control the Bitcoin price in the short term, the bulls could retort with a potential advantage from the spot ETF proposals under scrutiny by the U.S. Securities and Exchange Commission. These proposals, although in their infancy stages, explain why the bears have successfully defended $31,000 on numerous occasions since June. Their prime weapon to withhold Bitcoin’s price under $30,000 is centered on a deteriorating regulatory environment. For instance, on July 19, Nasdaq had to freeze the launch of its cryptocurrency custodian solution due to a lack of regulatory clarity in the U.S.
Moreover, on July 14, Coinbase announced a suspension of its staking services in certain states following a lawsuit from the SEC. Bitcoin’s price briefly surpassed $31,000 mid-July, fueled by bullish bets by traders using options contracts. However, a swift four-hour correction pulled back the price to $30,000. This suggests that over-optimism by Bitcoin bulls could lead to disappointing outcomes.
Should Bitcoin’s expiry price fall below $30,000, the call (buy) instruments of the bulls will be invalidated, pushing the advantage to the bears. Although not a significant victory, the bears’ favourable outcome of $35 million increases the likelihood of $30,000 becoming a new resistance area.
Despite the Bitcoin price limbo, the technological underpinnings of blockchain, the technology behind cryptocurrencies, remain fundamentally transformative and robust. The week’s expiry events serve as a reminder of the high volatility and unpredictability inherent in the crypto market. Such market dynamics, however, do not overshadow the inherent potential of blockchain technology. As external pressures continue to shape the market, one question persists – will the bears triumph in sustaining the price below $30,000, or will the bulls turn the tables just in time?