As the Asian trading day begins with a minor rise in Bitcoin and a fall in Ether, experts predict a pre-FOMC market correction, underscoring the resilience of digital assets amid US regulatory and debt challenges.
The decline in the put/get in touch with a ratio of bitcoin options suggests that crypto investors are less concerned than in June when U.S. lawmakers clashed over raising the country’s debt ceiling.
Bitcoin and Ether Continue to Thrive
Joe DiPasquale of BitBull Capital says the theme this week will be correction and consolidation before the next FOMC meeting minutes are released on June 14th.
“We expected a correction and consolidation between the $25,000 and $27,000 levels, and that is what we have witnessed over the last month,” he told CoinDesk in a note. “While we haven’t had a major test of $30K, another attempt at the key resistance level would not be surprising.”
Mark Connors, head of research at digital asset manager 3iQ, notes that it’s impressive that the digital asset market continues to thrive despite the hostile regulatory environment in the U.S. This is all thanks to a market that remains concerned about unprecedented debt issuance. within the U.S.
“With equity and debt markets wondering how much the U.S. Treasury’s renewed debt issuance will affect liquidity and thus market prices, digital assets are taking matters into their own hands,” he wrote to CoinDesk.
Connors writes that despite the 2023 focus on increasing Bitcoin dominance and rising fees amid a challenging regulatory environment in the U.S., Ethereum’s post-merger performance, including an unexpected non-impact of staking ‘unlocking,’ increased demand for staking and a deflationary promise fulfilled with over 250k ETH ‘burned,’ is attracting market attention.
“So while the fate of the $500 trillion equity and debt markets depends on the ability of central banks and treasury departments to provide much-needed liquidity, pioneering digital assets bitcoin and ether are taking care of business, and the market is responding, even if institutions and regulators are not,” he told CoinDesk.
Bitcoin’s Place Get in Touch with Ratio Declines After Recent Debt Deal
Derivatives data show a recent decline in a metric that tends to rise as bearish sentiment increases. The bitcoin options set/phone ratio on the exchanges is currently, 47, down from 1.34 at the beginning of June.
The buyer of a place option has acquired the right to sell the asset at a given price, while the buyer of a simply call option acquires the right to buy the asset. The relationship between the two can indicate investor sentiment, particularly when they rise or fall to extreme levels.
Put and call option volume is measured over the past 24 hours, with levels above one indicating bearishness and levels below one implying the opposite.
The recent drop indicates that fewer traders are looking to buy downside protection against future price declines. The increase in protection toward the end of the previous month was likely related to concerns about the debt deal recently agreed to by Democrats and Republicans.
Bitcoin (BTC) was rising slightly above $27 000 after the U.S. added 339 000 in May, which exceeded economists’ expectations. Coinbase’s head of institutional research, David Duong, shared his crypto market analysis.
By Marina Meza
