Prepare for BTC’s Next Breakout with this Bitcoin Options Strategy
• The article discusses the current macroeconomic trends affecting Bitcoin’s price and how investors are reacting to them.
• It also mentions regulatory developments, the upcoming halving, and increasing number of “whole-coiners” as potential catalysts for a bull run.
• Lastly, it highlights the liquidation risk associated with futures contracts for professional traders.
Macroeconomic Trends Affecting Bitcoin Price
Bitcoin’s price broke below its 55-day resistance at $27,000 on May 12, down 12.3% in 30 days. However, it decoupled from the S&P 500 Index which is basically flat from 30 days ago and 15% below its all-time high. This indicates that investors believe that the favorable macroeconomic trends for risk markets were overshadowed by the increasing risk perception of the cryptocurrency sector.
Crisis Could Fuel Price Increase
The impending U.S government debt ceiling crisis could cause an “economic and financial catastrophe” according to U.S Treasury Secretary Janet Yellen which should be beneficial for scarce assets as investors seek shelter from a weaker U.S dollar. Additionally, there is a $5.6 trillion commercial real estate market in the U.S subject to additional risks due to high interest rates and troubled regional banks leading into a possible real estate recession according to Guggenheim Partners chief investment officer Anne Walsh; however not across the entire real estate market..
Positive Regulatory Developments
There is also positive news on the cryptocurrency regulatory front as industry gains support against efforts of SEC with US Chamber of Commerce filing an amicus brief defending Coinbase exchange and accusing SEC of deliberately creating a precarious and uncertain landscape .
Halving & Whole Coiners
The upcoming Bitcoin halving expected for April-May 2024 where miners incentive per block will be reduced from 6.25 BTC to 3125 BTC has further fuelled investors’ hope; additionally addresses holding 1 BTC or more reached one million on May 13 according to Glassnode analytics firm with 190,000 “whole-coiners” added since February 2022 .
Futures Contracts Risk
Despite recent Bitcoin price weakness there are enough drivers and potential triggers to sustain considerable bull run in upcoming months; however professional traders are aware of liquidation risks associated with futures contracts .