This July 14 Bitcoin weekly options expiry holds the potential to be a significant turning point for market sentiment, potentially leading to a breach below the crucial $30,000 support level.
Despite the initial bullish surge triggered by the spot Bitcoin exchange-traded fund (ETF) requests, the recent macroeconomic data has not been favorable for risk-on assets.
Analyzing market sentiment is crucial in assessing the chances of Bitcoin (BTC) holding above $30,000 by July 14. This level acts as a threshold that could provide bears with a perfect opportunity to profit up to $120 million through the weekly option expiry.
Falling U.S. inflation is detrimental to Bitcoin in the short term
In June, the Consumer Price Index in the United States registered at 3.0%, the lowest level since March 2021. This was primarily due to a 16.7% decline in the energy index. While this indicates a slowdown in inflation, it remains above the Federal Reserve’s target of 2%, which is detrimental to Bitcoin, as higher interest rates incentivize investors to pivot into fixed-income investments.
One could argue that, in the short term, the lowering of inflation reflects a successful intervention by the Fed and could be viewed as a positive factor for Bitcoin’s bullish momentum. However, on July 12, the U.S. Dollar Index, which measures the dollar’s strength against major foreign currencies, reached its lowest level in 14 months.
In essence, investors’ confidence in the Fed’s ability to prevent a recession seems to be waning. Wharton professor Jeremy Siegel suggested that the U.S. economy is “progressing smoothly,” with consumers seemingly unaffected by higher borrowing costs. However, Siegel believes that consumers are currently utilizing the last of their cash reserves for travel and enjoying the summer.
ETF approval odds decreased after remarks from the SEC
The most compelling argument for the bulls to support further gains and sustain Bitcoin’s trading price above $31,000 on July 14 lies in the potential approval of the spot ETF. However, recent statements by Gary Gensler, chair of the U.S. Securities and Exchange Commission (SEC), have been unfavorable.
Gensler noted on July 12 that crypto exchanges often offer conflicting services, including trading directly against their own clients. Furthermore, he cautioned about the limited risk monitoring practices employed by crypto platforms, leaving them vulnerable to market manipulation, such as wash trading.
Over the years,…
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