Bitcoin’s price rallied on April 26th, breaking the $29,800 level and surging 9.6% in just 24 hours, reaching a high of $30,024 on Bitstamp.
Some analysts believe that the 50% drop in First Republic Bank (FRB) shares on April 25th served as a catalyst for Bitcoin’s recent surge.
Despite the positive shift, Bitcoin’s price remains 22.5% down in the past year, leading many bulls to remain pessimistic about its future. The FRB debacle came after the bank’s earnings report, which showed that clients’ deposits had declined by 40.8% during the quarter as customers pulled out their money.
Meanwhile, the US Federal Reserve has signaled its intention to hike interest rates above 5%, which could lead to a weaker economy and a bearish market structure for risk assets, including Bitcoin.
Some analysts believe that Bitcoin’s recent resistance at $31,000 is due to the harsh cryptocurrency regulatory environment, especially in the US.
Coinbase recently filed a court action to force the Securities and Exchange Commission to clarify industry rules, asking for clarification on how the SEC goes about classifying tokens as securities.
However, Bitcoin’s gains of 27% between March 26th and April 26th are just what bulls needed to succeed in April’s $3.2-billion monthly options expiry.
The open interest for the April 28th options expiry is $3.2 billion, but the actual figure will be lower since bears were expecting sub-$28,000 price levels. These traders were caught by surprise as Bitcoin gained 9.6% between April 25th and April 26th.
Bulls aim for $30,000 to secure a $ 780 million profit, and they are currently in a good position for the April $3.2-billion BTC monthly options expiry.
Meanwhile, bears need a 6.5% price drop from $29,800 to reduce their losses to $150 million. However, leveraged bets on the price downside using futures contracts recently saw $166 million in forced liquidations, leaving less room for bears to maneuver.