Bitcoin traders put eyes on $31K even as $2B in BTC options expire on Friday

The upcoming $2 billion Bitcoin (BTC) monthly options expiry on July 28 could potentially establish $29,500 as a support level. Some argue that the recent U.S. Federal Reserve interest rate increase to 5.25% had a detrimental effect on risk-on assets like cryptocurrencies. However, Bitcoin bulls believe that the full impact of a tighter economic policy takes time to influence the markets.

Looking back, the monthly expiry on June 30 did not cause significant volatility, given that Bitcoin had already experienced a 22.2% gain between June 15 and June 23. Conversely, the May monthly expiry triggered a 9% rally, with Bitcoin’s price rising from $26,100 on May 25 to $28,450 on May 29.

In contrast, the options expiry in April resulted in a 7% correction, as Bitcoin’s price dropped from $29,900 on April 27 to $27,800 on May 1. This data clearly indicates that the impact of options expiry takes a few days to consolidate but eventually becomes highly relevant for setting trends.

Bulls have regulatory and the ETF momentum on their side

There are multiple spot Bitcoin ETF requests from some of the world’s largest fund managers, including BlackRock and Fidelity. In addition, on July 26, a U.S. Lower House Committee approved a pair of bills aiming to clarify the distinctions between securities instruments and digital commodities.

The recent positive corporate earnings also support the bullish momentum in risk-on markets. Along with the latest Consumer Confidence data, they strengthen the argument that the risk of a recession is diminishing, at least in the short term. For starters, Meta Platform reported $32 billion in 2Q revenues, surpassing the market’s estimates.

Several other companies have also reported earnings above consensus, including McDonald’s, Coca-Cola, Google, Johnson & Johnson, Morgan Stanley and Novartis. As for the U.S. Consumer Confidence, the metric reached its highest level in 2 years, reaching 117 in July, up from 110.1 in June.

Data shows bulls were excessively optimistic on Bitcoin price

The open interest for the options expiry on July 28 is $2 billion. Still, the actual figure is expected to be lower because some bullish traders anticipated price levels of $31,000 or higher. This excessive optimism stemmed from Bitcoin’s price trading above the resistance level from July 13 to July 24.

The 0.56…