The price of Bitcoin has rallied strongly over the past few days as a result of the BlackRock news. The big question is whether the bulls can continue to push the price higher, or whether they are slowly running out of steam. With this in mind, there is currently a striking similarity in BTC’s 1-day chart to the rally in mid-March 2023.
Earlier, the price of BTC experienced a failure of more than 22% after reaching a one-year high of $25,200. The news from the macro and crypto environment is extremely bearish after the USDC lost its peg to the US dollar and a new banking crisis emerged. However, as a result of rumors of a Silicon Valley Bank (SVB) bailout, BTC began a 46% surge. Remarkably, this happened in a double bomb with a day of breathing.
Fast-forward to today, Bitcoin may be in that position again. As the price of Bitcoin dropped below $25,000 on June 14, the news was ultra bearish (Tether FUD, SEC lawsuits, etc.). Once again, however, BTC was saved by strong news: BlackRock’s filing for a Bitcoin spot ETF.
Since the news, BTC has risen by over 20%. Yesterday, the price took a breather. The million dollar question: Will the second part of the bomb come now, like in March, or has Bitcoin already experienced a double bomb (see the yellow circles). In this case, June 18 would be the equivalent of a one-day breather in the March rally.
Data Supports Bitcoin Bulls, But Caution Is Warranted
According to Greeks.live analysts, BTC options will be important today. A total of 31,000 BTC options expire today with a put-call ratio of 0.73, a maximum pain point of $27,000 and a notional value of $930 million. Buoyed by the rise of BTC, the value of BTC option positions increased by almost 50% this week.
“The current BTC and ETH each major term IV inversion is clear, now cross-currency IV arbitrage is very cost-effective, BTC IV long-term higher than ETH is not sustainable,” the analysts. NOTES.
Meanwhile, on-chain experts from Glassnode DECLARED yesterday that after the recent rally in the price of Bitcoin, market participants took a non-trivial profit of $537 million, the second largest profit-taking last year.
However, other on-chain data presented by analyst Axel Adler Jr shows that there is still potential for a second leg up. Like Adler WROTE, periods of low volatility (blue peaks) have historically been followed by rapid price movements (pink). These rallies are bigger than the one that BTC has experienced in the last few days. Adler said:
Last year, such fluctuations reached 30-40%. We are now experiencing another pink spike!
[UPDATE: 10:40 am EST]: BTC options are out of the way and have no significant price impact.
Featured image from iStock, chart from TradingView.com