Bitcoin Laptop Sherlock

Bitcoin price has regained some of its recent rally this week, but multiple data points suggest that $30,000 should hold as support going forward.

Bitcoin (BTC) remained in a narrow range of 4.3% for the 15 days ending July 7. Investor sentiment was hit hard by the failed attempt to break out of $31,400 on July 6, even though it was close to the $29,895 to $31,165 range.

Traders’ tendency to overreact to short-term price movements, rather than Bitcoin’s 82% year-to-date rally, could be part of the reason for the short-term correction. This same rationale applies to other cryptocurrency-related events.

The question on the minds of investors is whether the recent price rally was simply driven by multiple spot Bitcoin exchange-traded fund (ETF) requests.

In other pressing developments, Binance Chief Strategy Officer Patrick Hillman and other top compliance officers have weighed in on CEO Zhao Changpeng’s response to the Justice Department investigation. , It is reported that he retired from the exchange on July 6th. On June 29, the cryptocurrency exchange also informed users that its Eurobanking payment gateway may be out of service by September, halting deposits and withdrawals via SEPA bank transfers.

Meanwhile, the interest rate yield curve reached its deepest inversion since 1981 on July 3, with 10-year bonds trading at 3.86% while 2-year yields were at 4.94%, with long-term Contrary to expectations for bonds. . Investors are watching closely because the phenomenon preceded past recessions.

All of these events may have had some impact on Bitcoin price and investor sentiment. Both topics are covered in more detail below.

Traders Show Strength in Margin, Options and Futures Markets

OKX stablecoin/BTC margin lending ratio. Source: OKX

OKX Margin Lending Indicator based on Stablecoin/BTC Ratio Steady Rise from 20x Long Favorable on Jul 1st to 29x as of Jul 7th, Traders Using Margin Lending This indicates that there is a growing sense of trust between However, it remains in the neutral to bullish range, below the 30x historical benchmark associated with excessive optimism.

In addition to leaving room for further long-term leverage, the indicator shows no signs of potential stress on margin markets in the event of a sudden correction in the Bitcoin price.

Trader is not buying protective puts or increasing shorts

Traders can also gauge market sentiment by measuring increased activity through either call (buy) or put (sell) options. A put-to-call ratio of 0.70 indicates that open interest in put options lags behind bullish calls and is therefore bullish. In contrast, an indicator of 1.40 favors put options and is considered bearish.

BTC options put-to-call ratio.Source: Laevitas

The put-to-call ratio of Bitcoin options volume has been below 1.0 for the past three days, suggesting that neutral to bullish call options are favored more. The takeaway here is that despite Bitcoin’s price correction to $29,750 on July 7th, there was no significant surge in demand for protective put options.

The net long-to-short ratio of top traders excludes externalities that may have impacted the options market alone. Methodological discrepancies occasionally exist between different exchanges, so readers should monitor changes rather than absolute numbers.

The long to short ratio of the exchange’s top traders.Source: Coin Glass

OKX’s top traders’ long-to-short ratio rose from 0.52 on July 3 to 1.68 on July 7, showing leveraged longs despite Bitcoin’s failure to break above $31,000. It shows a strong demand for the position. On Binance, the metric dropped from 1.52 on July 3rd to 1.39 on July 7th, still above its 30-day average of 1.33, suggesting a neutral reading. increase.

Related: Bitcoin Mining Stocks Outperform BTC in 2023, But On-Chain Data Suggests Possible Stall

Bears will struggle given market expectations for possible ETF approval

Natalie Brunel, an award-winning Bitcoin journalist, podcast host and educator, told Cointelegraph how cryptocurrencies are now being taken seriously by institutional investors as an asset class. talked about Some of the largest asset fund managers in the world.

BlackRock CEO Larry Fink also said on the Fox Business show on July 5 that Bitcoin’s role is primarily “the digitization of gold,” prompting U.S. regulators to spotlight it. He suggested looking at how ETFs could democratize finance. Hedging against inflation or devaluation of certain currencies.

So, from a bird’s eye view, for those wondering if Bitcoin is ready for a correction after the ETF hype-fueled rise, traders’ bullish belief resilience and observations on BTC margins. A lack of excessive optimism indicates that they need to relax.

Bitcoin Options and Futures Markets Show Tough Times Ahead for Bitcoin Bears and Those Expecting a Sharp Price Correction Just for Regulation and Recession Fears .