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Bitcoin Dawdles Below $30K as Investors Eye Coming Fed Rate Decision, BTC Options Expiry

CoindeskCoindesk2023/07/21 21:46
By:Krisztian Sandor

Next week’s U.S. central bank interest rate decision and the bitcoin options expiry are unlikely to move markets, which have been stuck for weeks.

In another day of crypto market drudgery, bitcoin () briefly feinted higher Friday before settling back into its increasingly familiar environs below $30,000. The largest digital asset by market capitalization was recently trading at $29,904, up 0.3%.

Ether (), the second largest cryptocurrency, remained largely unfazed during the day, lingering at around its weekly low below $1,900. Major alternative cryptocurrencies – so-called altcoins – including and recovered some of their endured earlier in the day.

, governance token of decentralized finance lender MakerDAO, defied the broader market and double-digit gains, buoyed by the activation of a token buyback program.

But micro-cap token CNC cratered as much as 75% during the day following a 1,700 ETH – some $3.2 million – exploit of Conic Finance, a Curve-adjacent decentralized finance protocol.

The , which tracks the performance of a basket of digital assets, inched up 0.3% in the last 24 hours, underscoring a somewhat tepid trading day. Investors will be eyeing a likely Federal Reserve interest rate increase and bitcoin options expiry next week.

In an email, Rachel Lin, CEO and co-founder of decentralized derivatives exchange SynFutures noted that the week started with enthusiasm over a favorable ruling in the Ripple-SEC case as investors expressed hopes for an altcoin season. But BTC and ETH failed to break resistance and returned to their weekly range lows, weighing on the market.

“[Bitcoin] options data reveal high open interest in $31,000 and $32,000 Call Options, denoting strong resistance at these levels,” Lin said. “The past day has been more favorable, with call options trading nearly 3x the volume of put options.”

“Fundamentally, the outlook remains bullish as money continues to flow into the crypto ecosystem,” she added. “This could represent a brief reversal, potentially leading to a move up to $34,000 if BTC achieves a sustained breakout above $31,500.”

In an with CoinDesk TV's "First Mover" program, Will Peck, head of digital assets for asset manager WisdomTree, said that it was "tough" to pinpoint a near-term bitcoin price target. But he also suggested that the impact of the Securities and Exchange Commission (SEC) approving a spot bitcoin ETF from any of the financial services giants that filed applications last month, including WisdomTree, was uncertain.

"An underlying question is how much institutional money there might be out there," Peck said.

Lawrence Lewitinn, head of content at The Tie and CoinDesk TV contributor, said that neither the U.S. central bank's likely 25 basis point rate (bps) on Wednesday nor the end-of-month options expiry would likely stir bitcoin from its current lull.

"We'll see for the most par t prices stay flat, at least for the upcoming," Lewitinn said. "Unless there's some exogenous variable, some sort of crazy news story – who knows what [SEC Chair Gary] Gensler could do. But all things being equal, we're probably going to end up at about $30,000, a slow week."

Edited by James Rubin.

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Disclaimer: everything in the article represents the author's point of view and has nothing to do with this platform. This article is not intended to be used as a reference for making investment decisions.

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