$30K should be Support for Bitcoin, Say the Bulls but Derivatives Data Shows Otherwise

It was on May 12 when after hitting a 2-year low of $25,400, Bitcoin rebounded by 19. However, the main question is whether the market confidence has returned or not. For now, Bitcoin’s trend line is forming an ascending channel, suggesting a bullish movement. As per the collected and observed data from the market, it is highly likely that the bulls are aiming for $30,000.

The bulls are eager to set the $30,000 benchmark as a strong support level for Bitcoin. A strong purchasing spree may be witnessed if the bulls are indeed after the particular goal.

There is another theory (prediction) for Bitcoin that seems to be indicating its negative movement. The trend suggests that the derivatives may not be going with the same idea of Bitcoin reclaiming $30,000. Instead, it may support a negative trend. The reason behind such a prediction is the recent failed attempt by Bitcoin to hit the $31,000 mark on May 16.

Major Issues Causing Bitcoin Price Falters

One of the major factors the price of Bitcoin may be facing a downtrend would be due to Luna Foundation Guard (LFG). It reportedly had 80,081 Bitcoin invested through a number of positions. However, these Bitcoins had to be sold, which translated to 99.6% of the total Bitcoins in LFG’s possession.

Through the sell-off, LFG has succeeded in saving the project from a complete sell-off. The firm has also shared details surrounding the security of the cryptocurrencies that remain on its platform. However, the investors are now questioning other stablecoins about what their situation would be in the future. They are also worried about the applications running in the decentralized finance (DeFi) sector.

Sam Bankman-Fried, the FTX CEO talked about the protocol of Bitcoin that follows the proof-of-work (PoW). He reportedly criticized the PoW and supported the proof-of-stake (PoS) consensus of ETH over the proof-of-stake. This has resulted in causing damage to the reputation of Bitcoin in the global market.

Sentiments of Options Trades are OverStrained

The trend shows that things may turn ugly for Bitcoin if the skew indicator grows over 10%. When it does, the options investors may start fearing a price crash for Bitcoin. On the contrary, a 10% skew reflects a negative generalized excitement.

It was on April 6 when the skew indicator ended up growing over the 10% checkpoint. This resulted in causing fear among the options traders. Due to the fear and downside protection, the options traders were overcharged. At present, the level is at 19%, indicating an extremely bearish and fearful trend. Prior to this, the fear level was at 25.5%, considered the worst reading.

Due to the above indicator, Bitcoin is currently losing its demand and interest in the options markets as well as leverage buyers.

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