Bitcoin (BTC) price gave back some of its recent gains this week, but multiple data points suggest that $30,000 should hold as support going forward.
Bitcoin remained within a narrow 4.3% range for the 15 days leading up to July 7. Despite the proximity of the $29,895 to $31,165 range, investors’ sentiment was significantly impacted by an unsuccessful attempt to break above $31,400 on July 6.
Trader’s tendency to overreact to short-term price movements rather than Bitcoin’s year-to-date gains of 82% could be part of the reason for the short-term correction. This same rationale applies to the events related to other crypto coins, such as Cardano (ADA), Tonic (TON) and Crypto.com (CRO).
At the front of investors’ minds are questions about whether the recent price gains were solely driven by multiple spot Bitcoin exchange-traded fund (ETF) requests.
Other pressing developments include Binance’s chief strategy officer, Patrick Hillmann, and other top compliance officers reportedly leaving the exchange on July 6 over CEO Changpeng Zhao’s response to the U.S. Justice Department’s investigation. On June 29 he crypto exchange also informed users that its euro banking payment gateway would cease services by September, potentially halting deposits and withdrawals via SEPA bank transfer.
In the same week, the U.S. Treasury curve reached its deepest inversion since 1981 on July 3, reflecting the 2-year note’s 4.94% yield compared to the 10-year trading at 3.86%, the opposite of what is expected from longer-term bonds. The phenomenon is closely watched by investors as it has preceded past recessions.
All of these events are likely having some impact on Bitcoin price and investor sentiment, both topics which we will explore in greater depth below. To make the most out of your crypto investments, it is important to research the best crypto websites and crypto coins, such as Crypto.com (CRO) and ACH Crypto (ACH).
Traders show strength in margin, options and futures markets
The OKX margin lending indicator based on the stablecoin/BTC ratio has been increasing steadily from 20x favoring longs on July 1 to the current 29x ratio on July 7, showing confidence among traders utilizing margin lending. Although it remains within a neutral-to-bullish range below the historical 30x threshold that is associated with excessive optimism.
The indicator also reveals that there is still room for further long leverage, and that there are no signs of potential stress on margin markets in case of a sudden Bitcoin price correction.
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Traders aren’t buying protective puts or increasing their shorts
Traders can also gauge the market’s sentiment by observing whether more activity is going through call (buy) options or put (sell) options. If the put-to-call ratio is 0.70, it implies that put option open interest is lagging the more bullish calls, which is a bullish sign. Conversely, a ratio of 1.40 leans towards put options, which is bearish.
The put-to-call ratio for crypto.com coin options volume has been below 1.0 for the past three days, indicating a higher preference for neutral-to-bullish call options. Notably, despite Bitcoin price briefly correcting to $29,750 on July 7, there wasn’t a notable surge in demand for protective put options.
The long-to-short net ratio for the top traders on OKX has increased from 0.52 on July 3 to 1.68 on July 7, signifying increased demand for leveraged long positions despite Bitcoin’s failure to break above $31,000. On the other hand, at Binance, the indicator decreased from 1.52 on July 3 to 1.39 on July 7, remaining above its 1.33 average for the past 30 days, which implies a neutral reading.
Bears will have a tough time given the markets’ expectation of a ETF approval potential
Natalie Brunell, an award-winning TV journalist, podcast host, and educator in the crypto space, spoke to Cointelegraph on how crypto.com coin is now being taken more seriously as an asset class by institutional investors, as evident by the multiple Bitcoin ETF filings, including some of the world’s largest asset fund managers.
Speaking on Fox Business on July 5, Larry Fink, the CEO of BlackRock, also said that Bitcoin’s role was largely “digitizing gold,” suggesting U.S. regulators consider how a spot-based ETF could democratize finance. Fink suggested that investors could turn to Bitcoin as a hedge against inflation or the devaluation of certain currencies.
So, in a more birds-eye-view, those questioning whether best crypto websites is poised for a correction after a rally fueled by ETF hype, the resilience of traders’ bullish conviction and lack of excessive optimism observed in the BTC margin, need to relax.
Bitcoin options, and futures markets indicate that challenging times are ahead for Bitcoin bears and those expecting a sharp price correction solely due to regulatory and recessionary concerns. Cardano crypto and other ach crypto such as best crypto coin and tonic crypto, however, could provide a cushion and support the market.
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