Bitcoin, the largest cryptocurrency by market capitalization, is currently trading above $30,000, and investors are eagerly anticipating a strong July. Historical data from the past three years show that BTC has gained at least 20% in July, making it an attractive investment for those looking to add a crypto asset to their portfolio.
However, the price of bitcoin heading into the expiry of options contracts on Friday, June 30, will be a determining factor in whether the cryptocurrency rallies further or experiences a decline. Dealers may buy bitcoin in the spot and futures markets if it builds momentum above $30,000, which could result in an exaggerated price rally, also known as a gamma squeeze or sling-shot effect. On the flip side, dealers will be forced to sell on a potential decline below $30,000.
Markus Thielen, the head of research for crypto service provider Matrixport, predicts that Bitcoin could reach $33,000 to $36,000 by August. Thielen notes that Bitcoin has followed a pattern this year of rising about $10,000 before falling $5,000. After the US banking crisis in March, BTC sank to $20,000 after reaching as high as $25,000. Then, following this month’s SEC lawsuits against crypto exchanges Binance and Coinbase, it dropped to $25,000 from $30,000. Thielen added that BTC’s strongest rallies have occurred during US trading hours, indicating that US institutions are buying Bitcoin while other regions are less active.
Despite the recent spot bitcoin filings by BlackRock and other financial giants, SEC approval for a Bitcoin ETF is likely to be months away, if not longer. Investors remain cautiously optimistic, however, as other asset managers are filing their own ETFs, indicating that access to the asset class is becoming more widespread.
Other major cryptocurrencies, such as Ether, the second-largest crypto in market value, are currently in the red. In contrast, Bitcoin Cash has risen nearly 16% to reach a fresh one-year high. BCH, which forked from the original Bitcoin blockchain, extended its rally to more than 100% in the week after being one of the four cryptocurrencies listed on institutional-backed crypto exchange EDX Markets.
Overall, while the recent momentum from multiple spot Bitcoin filings by BlackRock and other financial giants sent the asset higher, investors are now addressing the realities that any SEC approval for a Bitcoin ETF is likely to be months away, if not longer, and that macroeconomic indicators remain uncertain.
Source: CoinDesk
