Bitcoin Holds Above $30,000 As Investors Wait For Historically Strong July, Eye Options Expiration
Could Bitcoin Be Heading Higher?
On Monday, the largest cryptocurrency by market capitalization was recently trading near $30,165, down 0.9% over the past 24 hours and a drop from the higher highs last Friday when BTC rose to a one-year high above $31,300. The momentum from several spotbit filings from BlackRock and other financial services giants that sent the asset higher dissolved as investors digested the realities that any SEC approval was months away, perhaps longer, and that macroeconomic indicators remained uncertain.
Still, Markus Thielen, head of research for crypto service provider Matrixport, wrote in a Sunday report that July has been a historically strong month, including 24%, 20% and 27% returns over the past three years.
“Therefore, the likelihood that Bitcoin will be 1[ads1]0-20% higher over the next 30 days is high,” Thielen wrote. “Bitcoin could be at $33,000 to $36,000 by August.”
Thielen noted that bitcoin had followed a pattern this year of rising around $10,000 before falling $5,000 only after the turmoil caused by the US banking crisis in March when BTC sank to $20,000 after reaching as high as $25,000 dollars and then after this month’s SEC lawsuit against crypto exchanges Binance and Coinbase when it fell to $25,000 from $30,000. “Now we seem headed for $35,000 as expectations of the Bitcoin ETF’s approval will bring more US institutions and US retail into this range.”
Earlier this year, Matrixport predicted that bitcoin would reach $45,000 by the end of the year. Thielen added that BTC’s strongest rally has occurred during US trading hours, “a sign that US institutions are buying Bitcoin while other regions are less active. Claiming ‘Crypto is dead in the US’ appears to be a misconception,” wrote he.
Meanwhile, bitcoin’s price as the market approaches Friday’s expiration of bitcoin options contracts could lead to an additional price increase, or cause it to spiral in the immediate aftermath. “If bitcoin builds momentum above $30,000 as expiration approaches, traders will buy the cryptocurrency in the spot and futures markets,” wrote CoinDesk’s Co-Managing Editor for Markets Omkar Godbole. “That in turn could lead to an exaggerated price rally, often called a gamma squeeze or sling-shot effect. On the flip side, traders would be forced to sell on a potential decline below $30,000.”
Ether, the second-largest crypto by market capitalization, recently changed hands at $1,854, off roughly 2.2% from Sunday’s same time. In an interview with CoinDesk TV’s “First Mover” program, Katie Talati, head of research for crypto asset management firm Arca, said that a developer proposal to change Ethereum’s maximum validator balance from 32 ETH to over 2,000 “shouldn’t necessarily have any effect on the price of ETH,” and calling the proposal “a long shot.”
Other major cryptos were mostly in the red with ADA and SOL, the tokens of smart contract platforms Cardano and Solana, recently both down more than 4%, although Bitcoin Cash was a rare bright spot, rising nearly 16% to hit a new one. year high. BCH, which broke away from the original bitcoin blockchain, extended its rally to more than 100% on the week after being one of four cryptocurrencies listed on institutional-backed crypto exchange EDX Markets.
The US stock markets started the week on a sour note with the technology-focused Nasdaq Composite and the S&P 500 closing down 1.1% and 0.4% respectively. The yield on 10-year US government bonds and safe-haven gold ticked upwards.
Arcas Talati was cautiously optimistic about investor enthusiasm after spotty bitcoin ETF filings over the past 10 days. “The bigger problem is that most people don’t realize that ETF approval is going to be a while away, if it happens,” she said. “The SEC has taken a very strong anti-crypto stance.”
But she added: “There may be some more pressure on regulators to approve this vehicle just because it’s being sponsored by BlackRock. We’re also seeing other asset managers for the traditional world filing their own ETFs, which is promising down the road when it is necessary to have access to the asset class.”
