As the cryptocurrency market stays focused on its constant state of movement and unpredictability, Bitcoin traders maintain a keen eye on the $31K mark, even as $2B in BTC options are set to expire this Friday. This upcoming expiry, happening on July 28, could notably establish $29,500 as a sturdy support level. While some contend that the recent increase in the U.S. Federal Reserve interest rate to 5.25% negatively impacted risk-on assets like cryptocurrencies, many Bitcoin optimists believe changes in economic policy take time to manifest in the markets.
Reflecting on past instances, the monthly expiry back in June did not spur notable volatility as Bitcoin had already enjoyed a 22.2% gain. Despite, the May monthly expiry stimulated a 9% rally, and we saw Bitcoin’s price rise. However, the situation played differently in April, with a 7% correction, as Bitcoin’s price dropped. This suggests that while the impact of options expiries takes a few days to settle, they eventually become highly relevant for setting trends.
But Bitcoin optimists also have forces on their side in the form of regulatory and ETF momentum. Major fund managers including BlackRock and Fidelity have submitted numerous spot Bitcoin ETF requests. Furthermore, a U.S. Lower House Committee has given the green light to a pair of bills aiming to elucidate the differences between securities instruments and digital goods.
Adding to this, positive corporate earnings alongside robust Consumer Confidence data argue against a looming recession, at least in the near term. High profile companies including McDonald’s, Coca-Cola, and Google, among others, have reported earnings surpassing consensus estimates. In addition, U.S. Consumer Confidence saw its highest level in 2 years – 117 in July.
Despite this, there was considerable over-optimism on the Bitcoin price in anticipation of the upcoming options expiry. Bitcoin bears are betting heavily on a sub-$29,000 price to turn a profit. The greatest chances for Bitcoin optimists require a 5.5% price increase before July 28 to secure a potential profit. However, pessimists only need a modest 2% fall below $29,000 to tip the scales in their favor. Could this arguably small potential profit be worth the gamble for the bears?
Looking at a broader, mid-to-long term scenario, Bitcoin bears might have an advantage due to the lure of higher fixed income returns and inflation and interest rate changes. Nevertheless, considering the overall economic bullish momentum, there’s an encouraging possibility for Bitcoin to break above $31,000 in the upcoming weeks. These fluctuating market dynamics keep every trader on their toes, as the tug of war between risk and reward continues.
Source: Cointelegraph
