Bitcoin price data suggests bulls will succeed in holding $30K as support this time
Bitcoin (BTC) has been trading above $31,000 after its 24.3% rally between June 15 and June 23, which caught many off guard. For bears, that meant facing $165 million in short futures contract liquidations, but the unexpected rally also brought some degree of discomfort for investors using Bitcoin derivatives.
Inflation remains the biggest question mark for traditional markets, a point highlighted by the recent 50-basis-point interest rate increase by the Bank of England, followed by similar moves in Norway and Switzerland, leading to the highest cost of capital in over a decade for the region.
In response to questions from lawmakers on the United States House Financial Services Committee on June 21, Federal Reserve Chair Jerome Powell said that “the process of getting inflation back down to 2% has a long way to go” and reiterated that “nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year.”
According to JPMorgan strategists led by Marko Kolanovic, “the economy’s recent resilience may delay the onset of a recession,” so the impacts of the monetary tightening movement by the central bank are yet to be felt, “and ultimately a recession will likely be necessary to return inflation to target.”
Investors now question whether Bitcoin has the strength to trade above the $30,000 resistance amid the bearish pressure emerging from a potential economic recession and further central bank activity aimed at curbing the demand for capital.
Consequently, traders should closely monitor Bitcoin futures contract premiums and the costs of hedging using BTC options.
Bitcoin quarterly futures are popular among whales and arbitrage desks. However, these fixed-month contracts
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