Is $30K a new springboard for Bitcoin bulls?

Bitcoin (BTC) failed to rally above $31,000 on June 23 and has been holding at the $30,300 resistance level for the past three days. Interestingly, during this time, gold reached its lowest level in three months, trading at $1,910 on June 22, down from a peak of $2,050 in early May.

Investors are now questioning how strong Bitcoin’s $30,000 support is and analyzing what caused the recent price rally is crucial to understanding how traders are positioned on BTC margin and futures markets.

Why did BTC price break above $30,000?

Some analysts attribute Bitcoin’s recent 21.5% gains in 11 days to BlackRock’s spot Bitcoin exchange-traded fund (ETF) filing. However, other events may have fueled the cryptocurrency gains. For example, on June 26, HSBC Bank in Hong Kong reportedly introduced its first local cryptocurrency services using three listed crypto ETFs.

Additionally, the ProShares Bitcoin Strategy ETF, a Bitcoin futures fund, experienced its largest weekly inflow in a year at $65 million, with its assets topping $1 billion. It was the first BTC-linked ETF in the United States and is one of the most popular among institutional investors.

• Price analysis of various cryptocurrencies including SPX, DXY, BTC, ETH, BNB, XRP, ADA, DOGE, SOL, and LTC on 6/26.
• Kaspa (KAS) grew by 60% and dominated the altcoin market.
• Binance withdraws license application in Austria.

More importantly, the U.S. crypto regulatory environment may be improving after a period marked by enforcement actions from the Securities and Exchange Commission (SEC) aimed at exchanges supposedly operating as unregistered securities brokers.

Related: How security, education and regulation can mitigate rising crypto scams

On June 25, Federal Reserve governor Michelle Bowman said that financial institutions had been left in a “supervisory void” in terms of emerging technologies, including digital assets. Bowman added that policymakers have been relying on “general but non-binding statements,” leaving substantial uncertainty and imposing new business requirements after significant investments have been made.

In that sense, a draft bill in the U.S. House of Representatives aims to prohibit the SEC from denying digital asset trading platforms registration as a regulated alternative trading system. Published on June 2, the proposed legislation would allow such firms to offer “digital commodities and payment stablecoins.”

Bitcoin margin, futures suggest bullishness

Let’s now look at Bitcoin derivatives metrics to better understand how professional traders are positioned amid improved regulatory perspectives and a sizable institutional inflow.

Margin markets provide insight into how professional traders are positioned because they allow investors to borrow cryptocurrency to leverage their positions.

OKX, for instance, provides a margin-lending indicator based on the stablecoin/BTC ratio. Traders can increase their exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only bet on the decline of a cryptocurrency’s price.

The above chart shows that OKX traders’ margin-lending ratio bottomed at 17 on June 20 but has improved over the past four days. The movement indicates a prevalence of margin longs as the present 24x ratio favors bullish stablecoin lending.

However, investors should analyze the Bitcoin futures long-to-short metric, which excludes externalities that might have solely impacted the margin markets.

There are occasional methodological discrepancies between exchanges, so readers should monitor changes instead of absolute figures.

Top traders at Huobi vastly increased their longs between June 22 and June 24 as Bitcoin price broke above the $30,000 resistance.

On the other hand, OXK’s top traders initially increased their shorts on June 22 and June 23, but subsequently reverted their positions by adding bullish bets.

Lastly, the top traders at Binance started adding longs on June 21 and have kept increasing bullish positions until June 23.

Bitcoin’s $30,000 support showing strength

Overall, Bitcoin bulls have added leverage-long positions using margin and futures markets backed by the positive momentum from multiple spot Bitcoin ETF requests, heavy institutional inflow, and a more rational approach from U.S. lawmakers.

The SEC’s approach of regulating through enforcement is not supported by some governors of the U.S. Federal Reserve and has faced significant opposition in the U.S. House of Representatives. For instance, Representative Warren Davidson has proposed the SEC Stabilization Act, citing “ongoing abuse of power” and calling for the removal of Gary Gensler as the SEC chair.

Considering the positive environment for cryptocurrencies, Bitcoin supporters should now have the advantage in maintaining the $30,000 BTC price support level in the upcoming weeks.

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