In a surprising turn of events, the electronic gold, the largest cryptocurrency by market capitalization also known asBitcoin, recently dipped below the $30,000 level. This fall, however, ought not to cause panic among the community members as it’s viewed as a fleeting aberration in the otherwise bullish trend, as per the elucidations given by Rachel Lyn, the esteemed CEO of derivatives decentralized exchange SynFutures.
Underpinning this sentiment is the noticeable absence of traders selling $30,000 bitcoin call options. This could be telling postulation that market participants do not envisage the $30,000 level evolving into a fundamental resistance, at least not in the short-term. The majority of the trading period in July showcased bitcoin trading above the $30,000 banner, thanks to boosting factors like the spot bitcoin ETF application by asset oligarchy – BlackRock, and a partly welcoming court ruling on Ripple’s XRP.
Yet, the jubilant uptrend was shrouded recently when prices took a fall below $29,000 before a moderate ascend to the existing $29,350 level. Despite this slight hiccup, Lyn emphasizes it as a temporary deviation. She explicates this view by asserting that this short-term correction is merely a normal reaction from the vigorous uptrend observed over the past six months. Essentially, she casts light on the $31,000 call option as it maintains its allure of high open interest from market participants, thus potentially becoming a formidable point of resistance in an event of a bounce in BTC’s price.
Options are financial devices providing right of ownership to traders to either acquire or vend an underlying asset at a specified price in the future. For instance, Bitcoin traders frequently use call options as an affordable avenue to leverage bullish predictions on the price.
At such a time when volatility is relatively suppressed in the crypto market, Singapore-based Matrixport suggests an interesting strategy to investors – divest the spot BTC, and invest in call options to avail optimized returns.The recent market data indicates Bitcoin trading at $29,350, marking a 1.5% descent over the week.
At this juncture, it is vital not to be swayed by the momentary slump but focus upon the larger trend Bitcoin continues to adhere to. One has to remember that the face of blockchain innovations is not without its ups and downs but presents an exceptional future in the long haul.
Source: Coindesk
