Bitcoin bears have run out of coins? What this analyst predicts for BTC at $30,000

Image by: Daniele Franchi – Unsplash

Despite today’s macroeconomic developments, bitcoin price continues to move sideways and is likely to stay on that path. The number one cryptocurrency by market cap’s volatility has dropped to new lows as its price remains stuck at current levels.

At the time of writing, Bitcoin is trading at $26,600 with sideways movement over the past 24 hours. In the past 7 days, the cryptocurrency has seen some gains but has failed to scale above or below the $28,000-$30,500 range.

BTC price is moving sideways on the daily chart. Source: BTCUSDT trade view

A New Normal for Bitcoin? Volatility is expected to fall until this changes

Analyst Dylan LeClair pointed out that operators in the derivatives sector have dominated the current bitcoin price action. In this sense, the ratio of BTC spot to derivatives trading volume followed volatility and fell to all-time lows.

As can be seen in the chart below, this ratio shows that the spot market has been stifled by the derivatives sector and traders have been “making each other oblivious”. LeClair explained the following:

(…) Spot bears have mostly run out of coins and spot bulls are either fully engaged or sidelined. TradFi is awaiting ETF approval.

BTC’s spot-to-derivatives ratio (measured by trading volume). Source: CryptoQuant via Dylan LeClair on X

With the US Federal Reserve (Fed) out of action until September and near-term uncertainty low, Bitcoin’s price appears poised to continue to fluctuate around its current level.

In this environment, derivatives traders are likely to benefit from selling volatility across various financial instruments. Data from derivatives platform Deribit shows an increase in call contracts (buy contracts) in the options sectors maturing from October to December.

A report published by this Rogue Trader Academy platform highlights the need for a catalyst to push BTC out of its current range. The market is gearing up for the approval of a bitcoin spot exchange traded fund (ETF) in Q4 2023, which is the reason players in the options markets are piling up their demands.

Selling volatility was a profitable strategy in July. However, with the metric hovering around historic lows, traders are becoming more resilient to dumping their contracts onto the derivatives sector, further depressing BTC’s price. The Rogue Trader Academy explained:

(…) Those who sell volatility (gamma sellers) are increasingly reluctant to sell at historically low levels of implied volatility, especially with key economic data for this week such as the US Consumer Price Index (CPI) on the horizon.

In this low volatility, low liquidity environment, only a catalyst can propel BTC above $30,000 and above $40,000 by year-end. In this regard, something seems obvious: Bitcoin appears to be ahead of all bullish narratives and looks likely to outperform in the industry for the remainder of 2023.

Cover image from Unsplash, chart from Tradingview

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