Bitcoin (BTC ) recovered the $63,000 level on Thursday. However traders worry about a potential correction in advance of Deribit’s Friday $1.4billion options expiry. Concerns stem from a rise in the US government bonds yield, which many see as a sign of danger. Does the support level of $62,000 look at risk?
The key takeaways
- Risk assets are negatively affected by rising US Treasury yields, which signal concerns about debt.
- Bitcoin puts-to-call volume that is balanced suggests a limit to the downside of $62,000.
Bitcoin/USD vs. US 10-year Treasury yield. Source: TradingView
Bitcoin ETF withdrawals will not be a problem before the expiration of Bitcoin options
Investors’ anxiety about US government debt is reflected in the 10-year Treasury yield approaching 4.6%. This could indicate that further monetary expansion will be needed to prevent an economic slump. Bitcoin, which has been trading in a range of prices for the past few days, is feeling the pressure. The Nasdaq-100 Index is only 4% away from its record high.
AI’s positive momentum continues to drive capital towards equities. The oversubscribed SK Hynix IPO in US contributed to the rise of the tech sector on Thursday. Leading the way were Arm Holdings’ (ARM) gains of 10%, Advanced Micro Devices’ (AMD), 7% and Microns 7% gains intraday.
The net revenue for Wednesday was $85 millions outflows from spot Bitcoin ETFsThis brings to an end a three-day run of inflows. The figure is not a confirmation of a change in the institutional flow. The demand for Bitcoin option has been balanced between buy (calls) and sell (puts).
Deribit’s Bitcoin option put-to call volume ratio. Source: Laevitas
In the past 4 days, call option volume outstripped put options. This suggests a decreased demand for downtrends. The upcoming options expiry has an interesting set-up. Calls up to $62,500 are worth $137 million while puts over $61,000 total $121 million.
Deribit BTC opens interest in July 10, BTC. Source: Deribit
Bitcoin bulls will gain significant ground if they move over $63,500 before the Friday 8:00 UTC deadline, increasing their lead to $190,000,000. The bears have a $100 million advantage below $61,000. This limits their ability to act without further catalysts.
A decline in the oil price could boost demand for risky assets
Bitcoin could be pushed higher by a temporary truce between Israel and the Palestinians. Continued strength in the AI sector drains capital The fear is that the Treasury will issue large amounts of debt to pay for it.
Related: Bitcoin peels back to $62K as Fed-wary futures traders cut risk: Is the BTC rally over?
Crude WTI oil futures (left) vs. Nasdaq 100 Index futures (right). TradingView
Investors need to closely watch whether Treasury yields are going to subside in the coming week, and if a worsening war with Iran will push oil prices up. The market is poised to reinforce the $62,000 level of support, as the recent buying of Bitcoin put options has been restrained.
Bitcoin finds itself in an awkward position. While a resolution of the expiry at or above $63,500 might provide a short-term boost, sustained momentum upward would need a macroeconomic push. Bitcoin is expected to have a limited upward momentum in the short term as long these dynamics continue.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: cointelegraph.com
