Bitcoin Aims for July Rally as Investors Anticipate Options Expiry and Historic Gains

The world’s largest cryptocurrency Bitcoin (BTC) has been holding above $30,000, however, it needs a further catalyst to push above the current resistance zone. The latest price in Bitcoin comes following the spot-Bitcoin ETF application by BlackRock and other financial giants over the past week.

However, analysts are now expecting some bullish momentum considering BTC’s past performance in the month of July. Over the past three years, the Bitcoin (BTC) price has given run-ups of 24%, 20%, and 27% in the month of July.

In the latest report on Sunday, Markus Thielen, head of research for crypto service provider Matrixport wrote:

The probability that Bitcoin will be 10-20% higher during the next 30 days is high. Bitcoin could be at $33,000 to $36,000 by August. Now we appear on the way to $35,000 as the expectations for the Bitcoin ETFs approval will bring more U.S. institutions and U.S. retail into this space.

As per the Maxiport report earlier this year in 2023, the Bitcoin (BTC) price should reach $45,000 by the end of the year. Thielen further noted that Bitcoin’s strongest rallies this year have happened in the Us trading hours. This shows that US institutions are buying Bitcoin more actively.

Also, the upcoming Friday’s options expiry this week could fuel further price action in Bitcoin. CoinDesk Co-Managing Editor of Markets Omkar Godbole explains:

If bitcoin builds momentum above $30,000 as expiry approaches, dealers will buy the cryptocurrency in the spot and futures markets. That, in turn, could lead to an exaggerated price rally, often called a gamma squeeze, or sling-shot effect. On the flip side, dealers will be forced to sell on a potential decline below $30,000.

Bitcoin Volatility and Turbulence

As the Bitcoin price holds above $30,000, it could possibly face some turbulence and volatility in the near future. According to Shaun Fernando, the Chief Risk Officer at Deribit, there is a price level for Bitcoin called the ‘max pain’ point.

This is when option holders could face the most financial loss, while option sellers could make the most profit. Currently, the ‘max pain’ point for Bitcoin is $26,000. This information suggests that after the options expire, it could help reduce the downward pressure on Bitcoin’s price. He added:

With an impressive open interest of over $350 million at the 30k strike, the approaching quarterly expiration promises an exhilarating conclusion, carrying the potential for price turbulence amidst diverse gamma hedging strategies.

Along with Bitcoin, Ether and other altcoins are also seeing some kind of selling pressure with the ETH price continuing to hold above $1,850. Fernando said that Ethereum has witnessed substantial institutional selling activity. However, its implied volatility has been less than that of Bitcoin’s.