Bitcoin is stuck below $20,000. The macroeconomic environment has led to expectations for a long-term BTC bull run.
The expiration of $410 million worth of options this week presents an opportunity for BTC bulls to make money, but the reasons depressing stock markets lessen the likelihood that Bitcoin will reverse its trend.
On September 6, the price of Bitcoin (BTC) fell below $19,000, reaching its lowest point in 80 days. The movement destroyed leveraged long (buy) futures contracts worth $246 million and entirely wiped off the 32% profits made from July through August 15.
The price of bitcoin has decreased over the year, but it’s crucial to consider how it has changed concerning other assets. In the past 30 days, Palantir Technologies (PLTR) has fallen 36.4%, Moderna (MRNA), a pharmaceutical and biotechnology business, has down 30.4%, and oil prices have fallen 23.5% since July.
Investors are staying away from riskier assets due to inflationary pressure and concerns about a worldwide crisis. This protective behavior has driven the 5-year yield on U.S. Treasuries to 3.38%, close to its highest level in 15 years, by investors seeking safety in cash holdings, mostly in the dollar itself. Investors lack faith in the inflation controls by requesting a higher premium to retain government debt.
China’s exports increased by 18% in July before growing by 7.1% in August, according to data released on Sept. 7. In addition, statistics from Germany’s industrial orders released on September 6 indicated a 13.6% decline in July compared to the prior year. Therefore, there is little chance of a sustained Bitcoin bull run unless there is substantial decoupling from traditional markets.
Although there is $410 million in open interest for the options expiration on September 9, the real amount will be less since the bears were overconfident. Because their bets were aimed at $18,500 and lower, these traders did not anticipate $18,700 to hold. The $180 million call (buy) open interest and the $230 million put (sell) open interest are inequitable, as shown by the 0.77 call-to-put ratios. Since Bitcoin is now trading at $18,900, the majority of bets from both sides will probably end up being worthless.
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