Currently, Bitcoin is trading at $26,600 and has experienced sideways movement over the past 24 hours. Although the cryptocurrency has seen some gains in the past seven days, it has remained within the range of $28,000 to $30,500 without breaking above or below.
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BTC at $30,000: Analyst's Forecast. A New Normal For Bitcoin? Volatility Likely To Decline Until This Changes
According to analyst Dylan LeClair, the derivatives sector has been the driving force behind the current Bitcoin price movement. The ratio of BTC spot-to-derivative trading volume has reached an all-time low due to the volatility. BTC at $30,000: Analyst's Forecast. The chart below indicates that the derivatives market has been overpowering the spot market with traders fiercely competing against each other. LeClair expressed the following opinion:
(…) spot bears have mostly run out of coins & spot bulls are either fully deployed or are sidelined TradFi waiting for ETF approval.
BTC’s spot-to-derivatives ratio (as measured by trading volume).
With the U.S. Federal Reserve currently out of session until September and low uncertainty in the short term, the price of Bitcoin is expected to remain steady at its current levels. Derivatives traders are likely to benefit from selling volatility through various financial instruments. According to data from the derivatives platform Deribit, there has been an increase in call (buy) contracts on the options sectors for October to December expiry.
A report by Rogue Trader Academy posted on the platform highlights the need for a catalyst to push BTC out of its current range. The market is positioning itself for a Bitcoin spot Exchange Traded Fund (ETF) approval in Q4 2023, which is why players on the options markets are accumulating calls.
Selling volatility has been a profitable strategy in July. However, as the metric hovers around historical lows, traders become more resilient to dump their contracts on the derivatives sector, further suppressing BTC’s price, as stated by Rogue Trader Academy.
(…) those selling volatility (gamma sellers) are growing hesitant to offload at such historically low implied vol levels, especially with significant economic data like the US Consumer Price Index (CPI) on the horizon for this week.
In this low volatility, low liquidity environment, only a catalyst will push BTC beyond $30,000 and beyond $40,000 by the end of the year. Something seems apparent in this context: Bitcoin seems ahead of any bullish narrative and likely to outperform in the sector for the remainder of 2023.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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