Can Bitcoin Bulls Use $30K as Springboard for Success?

After failing to reach above $31,000 during a rally on June 23, Bitcoin (BTC) has kept the $30,300 resistance intact for the past three days. Interestingly enough, this occurred while gold dropped to its lowest point in three months, trading at $1,910 on June 22, a decrease from its peak of $2,050 in early May.

Investors are now questioning the stability of Bitcoin’s $30,000 support. Therefore, it is essential to analyze what drove the recent price surge in order to understand how traders are positioned on BTC margin and futures markets.

Why did BTC price break above $30,000? 

Some analysts believe the 21.5% increase of Bitcoin in 11 days is due to BlackRock’s Bitcoin exchange-traded fund (ETF) filing. However, there may be other factors leading to the cryptocurrency’s growth. For example, on June 26, HSBC Bank in Hong Kong reportedly launched its first local cryptocurrency services with three listed crypto ETFs.

The ProShares Bitcoin Strategy ETF, a Bitcoin futures fund, had its largest weekly inflow in a year at $65 million, and its assets have now surpassed the $1 billion mark. It was the first BTC-linked ETF in the U.S. and is highly sought after by institutional investors.

Despite enforcement actions taken by the Securities and Exchange Commission (SEC) against exchanges accused of functioning as unregistered securities brokers, the United States crypto regulatory environment may be improving.

How can security, education and regulation be used to reduce the prevalence of crypto scams?

On June 25, Federal Reserve governor Michelle Bowman declared that financial institutions have been left in a “supervisory gap” with regard to modern technologies, such as digital assets. Additionally, Bowman mentioned that policymakers have been depending on “non-specific but non-obligatory statements” which has created a great deal of hesitation and necessitated additional business requirements after considerable investments have been made.

A draft bill recently presented to the United States House of Representatives seeks to prevent the SEC from rejecting applications for registration from digital asset trading platforms as regulated alternative trading systems. If passed, this legislation passed on June 2nd would allow these firms to offer digital commodities and payment stablecoins.

Bitcoin margin, futures suggest bullishness

Now, let’s analyze Bitcoin derivatives statistics to get a better grasp of how professional traders are positioning themselves in light of more favorable regulations and a considerable influx of institutional capital.

Margin markets offer an insight into the positioning of professional traders due to the fact that they enable investors to borrow cryptocurrency to magnify their positions.

OKX, for example, offers a margin-lending indicator based on the stablecoin/BTC ratio. Traders can amplify their exposure by obtaining stablecoins to purchase Bitcoin. Conversely, Bitcoin borrowers are only able to wager on the decrease of a cryptocurrency’s value.

The chart above illustrates that the margin-lending ratio for OKX traders hit its lowest point of 17 on June 20th, but has since improved over the past four days. This indicates that there is a greater preference for margin longs, as the current 24x ratio is more beneficial for bullish stablecoin lending.

Investors should still analyze the Bitcoin futures long-to-short metric, disregarding external factors that could have only affected the margin markets.

It is advisable for readers to pay attention to any changes in methodology between exchanges rather than to rely solely on the absolute figures.

Top traders at Huobi significantly boosted their long positions from June 22 to June 24 as Bitcoin surged past the $30,000 resistance.

On the contrary, OXK’s leading traders initially increased their short positions on June 22 and 23, yet later changed their outlook and added bullish investments.

The traders at the top of Binance have been increasing their bullish positions since June 21, and this trend has continued until June 23.

Bitcoin’s $30,000 support showing strength

Overall, Bitcoin bulls have been bolstered by the positive momentum from multiple spot Bitcoin ETF requests, heavy institutional inflow, and a more rational approach from U.S. lawmakers, and have subsequently increased their leverage-long positions via margin and futures markets.

The approach of the SEC to regulate by enforcement has not been supported by some Federal Reserve governors and has met with strong criticism in the House of Representatives. For instance, Representative Warren Davidson has proposed the SEC Stabilization Act, alleging “ongoing abuse of authority” and calling for the dismissal of Gary Gensler as chair of the SEC.

In light of the optimistic outlook for cryptocurrencies, Bitcoin bulls should be able to keep the $30,000 BTC price support level in the upcoming weeks.