Bitcoin (BTC) fell back south of the $30,000 level on Monday to hit its lowest point since late June at $29,600.
The world’s most valuable cryptocurrency network by market capitalization is now down about 6% from more than a year highs that hit around $31,800 last Thursday.
News that a district judge had ruled that they did not consider XRP a security, at least outside the context of Ripple’s token sales to financial institutions, sent crypto markets soaring last week.
But profit-taking in the wake of bitcoin’s spectacular rally this year (BTC is up over 80% year-to-date) prevented BTC from convincingly breaking north of its recent $29,000-$31,000 range.
Some analysts said concerns about the financial health of the world’s largest cryptocurrency exchange Binance, which was last week it reported that it was considering laying off up to a third of its workforceand it was reported that employee benefits are being cut this week, it could be affecting sentiment.
Binance’s woes suggest that the much-discussed “crypto winter” that saw a major contraction for the industry in 2022 has yet to fully thaw.
However, the fact that bitcoin is finding strong support in the mid-$29,000s and has yet to convincingly break south of its 21-day moving average are good signs that the bulls have relinquished control completely. for now.
In fact, several other metrics suggest that the bulls are still anticipating more upside.
These metrics show that BTC bulls still anticipate further upside
Bitcoin options markets still suggest that investors are paying a premium for BTC options that are paid in the event of a further rally, a sign of still strong sentiment.
While the bitcoin price may be at one-month lows, the 25% delta bias of bitcoin options expiring in 7, 30, 60, 90 and 180 days remain at fairly high levels between 1 and 4, according to the data submitted by The block.
In fact, with the 180-day delta bias maxing out at 4, the message from the options markets is that investors expect further bullishness for Bitcoin in the coming months, rather than short-term explosive rallies.
A delta bias of 25% below zero means that Bitcoin bullish calls trade at a premium to equivalent bearish puts, suggesting that investors are disproportionately in demand for the former.
Elsewhere, at 0.43, the open interest ratio on bitcoin call/put options is also holding at low levels.
A ratio in the open interest of put and call options below 1 means that investors prefer to own call options (bets that the price will go up) over put options (bets that the price will go down).
Meanwhile, a decreasing ratio suggests that this mismatch in demand between the two types of options is increasing (ie bullish sentiment is increasing).
While a sharp drop below the mid-$29,000 support and subsequent slide back to the late-May highs in the mid-$28,000s is a possibility as near-term bullish momentum continues to fade, without would certainly be a surprise to the options market. .
In terms of potential volatility triggers for the week, things are fairly quiet on the macro front, with little US Tier 1 data this week aside from Thursday’s release of June retail sales numbers.
Ongoing issues in the crypto industry such as regulation, XRP demand, crypto winter, and institutional adoption hopes (in the wake of last month’s bitcoin ETF filings from Wall Street heavyweights) They will remain front and center.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all your capital.
