Will $30K Be A New Springboard For Bitcoin Bulls?

After an unsuccessful rally above $31,000 on June 23, Bitcoin (BTC) has held the $30,300 resistance for the past three days. Interestingly, this happened as gold hit its lowest level in three months, trading at $1,910 on June 22, down from a peak of $2,050 in early May.

Investors are now questioning how solid Bitcoin’s $30,000 support is. Therefore analyzing the reason for the recent price rally is essential to understand how traders are positioned on BTC margin and futures markets.

Why did BTC price break above $30,000?

Some analysts attribute bitcoin’s recent 21.5% gain in 11 days to BlackRock’s spot bitcoin exchange-traded fund (ETF) filing. But other events may have fueled the cryptocurrency’s gains. For example, on June 26, HSBC Bank in Hong Kong reportedly launched its first local cryptocurrency services using three listed crypto ETFs.

In addition, the ProShares Bitcoin Strategy ETF, a bitcoin futures fund, experienced its largest weekly inflows of $65 million in a year, taking its assets over $1 billion. It was the first BTC-linked ETF in the United States and remains one of the most popular among institutional investors.

But, more importantly, the US crypto regulatory environment may be improving after a period marked by enforcement actions from the Securities and Exchange Commission (SEC), aimed at exchanges allegedly operating as unregistered securities brokers. Is.

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On June 25, Federal Reserve Governor Michelle Bowman said that financial institutions have been left in a “supervisory vacuum” when it comes to emerging technologies, including digital assets. Bowman said policymakers are relying on “general but non-binding statements,” which is causing substantial uncertainty and new business requirements are being implemented after significant investments have been made.

In that sense, a draft bill in the US House of Representatives aims to prevent the SEC from denying digital asset trading platforms registration as a regulated alternative trading system. Published on June 2, the proposed legislation would allow such companies to offer “digital commodity and payment stable coins”.

Bitcoin Margins, Futures Signal Bullish

Let’s now look at bitcoin derivatives metrics to better understand the position of professional traders amid a better regulatory outlook and large institutional inflows.

Margin markets provide positional information to professional traders as they allow investors to borrow cryptocurrencies to leverage their positions.

For example, OKEx offers a margin-lending indicator based on the stablecoin/BTC ratio. Traders can increase their risk by borrowing stablecoins to buy bitcoin. On the other hand, bitcoin borrowers can only bet on the decline in the price of the cryptocurrency.

The above chart shows that the margin-lending ratio of OKEx Traders stood at 17 on June 20, but has improved over the last four days. This activity indicates the prevalence of margin longs as the current 24x ratio increasingly favors stablecoin lending.

Nevertheless, investors should analyze the long-to-short metrics of bitcoin futures, which do not include outliers that can affect purely margin markets.

There are occasional methodological discrepancies between exchanges, so readers should keep an eye on changes rather than absolute figures.

Top traders on Huobi increased their holdings heavily in the period between June 22 and June 24 as the bitcoin price climbed above the $30,000 resistance level.

On the other hand, top traders on OXK initially increased their shorts on June 22 and June 23, but later retracted their positions by adding bullish bets.

Lastly, top traders on Binance began adding longs on June 21st and maintained bullish positions until June 23rd.

Bitcoin’s $30,000 Support Is Showing Strength

Overall, bitcoin bulls have added leveraged-long positions using margin and futures markets due to positive momentum from multiple spot bitcoin ETF requests, heavy institutional inflows and a more rational approach from US lawmakers.

The regulation-by-enforcement approach of the SEC is not supported by some US Federal Reserve governors and has faced some severe backlash in the US House of Representatives. For example, Representative Warren Davidson has introduced the SEC Stabilization Act, citing “ongoing abuse of power” and seeking the removal of Gary Gensler as SEC chairman.

Given the favorable outlook towards the cryptocurrency, Bitcoin bulls should now have the upper hand to maintain the $30,000 BTC price support level in the coming weeks.

This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.