Last week, bitcoin attempted to break a declining trend with an initial attempt on June 16, but failed to cross the $22,600 barrier. The next attempt at $21,400 was met on June 21 with an 8% pullback.
After two failed breakouts, the price is currently trading below $20,000, raising the question – ‘Was $17,600 down?’
The more bitcoin tries to break out of this negative pattern, the tighter the resistance line becomes, and traders are keeping a watchful eye on the movement. For the situation to improve, bulls should demonstrate strength on this week’s $2.25 billion monthly options maturity.
European Central Bank (ECB) President Christine Lagarde expressed her belief in the importance of tighter regulation, with potential hurdles weighing heavily on crypto markets.
Bitcoin miners are being forced to liquidate their BTC holdings, adding additional pressure to the BTC market. According to Arcane Research, publicly traded bitcoin mining businesses liquidated 100% of their BTC production in May, compared to an average of 20% to 40% in previous months.
The miners together own 800,000 BTC, raising fears about a possible sell-off. Furthermore, the fall in the price of bitcoin has eroded the profits of miners as manufacturing costs sometimes exceed their margins.
The June 24 option expiration will be particularly worrying for traders as bitcoin bears are expected to attack gold by pushing BTC below $20,000.
What’s in Store for Bitcoin on June 24th?
These investors were completely wrong when bitcoin fell below $28,000 on June 12th, yet their optimistic predictions for monthly options expiration exceeded $60,000.
The 1.70 call-to-put ratio reflects the superiority of $1.41 billion call (buy) open interest over $830 million put (sell) options. However, once Bitcoin drops below $20,000, the most bullish options may turn out to be worthless.
If the price of bitcoin stays below $21,000 on June 24 at 8:00 AM UTC, only 2% of these call options will be available. This difference occurs when the right to buy bitcoin for $21,000 is void if BTC trades within that amount at expiration.
How low will the price of BTC go?
Bitcoin bearish on June 24th should take the market below $20,000 for gains of $620 million. On the other hand, an increase of more than $22,000 is needed to reduce the impact to $140 million to the bulls.
Bitcoin bulls liquidated $500 million in excessive long staking on June 12 and 13, so they would have little margin to force the price north. Given this information, bears have a better chance of holding BTC below $22,000 before the option expires on June 24.