Will $30,000 be a new stepping stone for Bitcoin bulls?

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After a failed rally above $31,000 on June 23, Bitcoin (BTC) held the resistance at $30,300 for the past three days. Curiously, this happened as gold hit a three-month low, trading at $1,910 on June 22, from a high of $2,050 in early May.

Investors are now wondering how strong Bitcoin’s $30,000 support is. It is therefore essential to analyze the causes of the recent price increase to understand how traders are positioning themselves in the BTC margin and futures markets.

Why did the price of BTC break through $30,000?

Some analysts attribute Bitcoin’s recent 21.5% gain in 11 days to BlackRocks’ filing of the Bitcoin exchange-traded fund (ETF). But 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 crypto-listed ETFs.

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

But, more importantly, the regulatory environment for crypto in the United States could improve after a period marked by enforcement actions by the Securities and Exchange Commission (SEC) aimed at exchanges supposed to operate as as unregistered securities dealers.

Related: How Safety, Education, and Regulation Can Mitigate the Rise of Crypto Scams

On June 25, Federal Reserve Governor Michelle Bowman said financial institutions have been left in a surveillance vacuum in terms of emerging technologies, including digital assets. Bowman added that policymakers have relied on broad but non-binding statements, leaving substantial uncertainty and imposing new business requirements after significant investments have been made.

In this sense, a bill in the United States House of Representatives aims to prohibit the SEC from refusing the registration of digital asset trading platforms as a regulated alternative trading system. Released on June 2, the bill would allow these companies to offer digital products and payment stablecoins.

Bitcoin Margin, Futures Suggest Uptrend

Let’s now take a look at Bitcoin derivatives metrics to better understand how professional traders are positioning themselves amid an improved regulatory outlook and heavy institutional inflow.

Margin markets provide insight into the position of professional traders, as they allow investors to borrow cryptocurrency to leverage their positions.

OKX, for example, provides a margin lending indicator based on the stablecoin/BTC ratio. Traders can increase their exposure by borrowing stablecoins to buy Bitcoin. In contrast, Bitcoin borrowers can only bet on a fall in a cryptocurrency price.

OKX stablecoin/BTC margin lending ratio. Source: OKX

The chart above shows that OKX’s margin lending ratio for traders hit a low of 17 on June 20, but has improved over the past four days. The move indicates a prevalence of long margins, as the current ratio of 24x favors bullish stablecoin lending.

Nonetheless, investors should analyze the long-to-short Bitcoin futures metric, which excludes externalities that may have only affected margin markets.

Exchange the best bitcoin traders long-short ratio. Source: CoinGlass

There are sometimes methodological discrepancies between exchanges, so readers should keep an eye out for changes rather than absolute numbers.

Top Huobi traders increased their buying significantly between June 22 and June 24, with Bitcoin price breaking above the $30,000 resistance.

On the other hand, OXK’s top traders initially increased their short positions on June 22-23, but then reversed their positions by adding bullish bets.

Finally, Binance’s top traders started adding long positions on June 21 and continued to increase their bullish positions until June 23.

Bitcoins $30,000 support showing strength

Overall, Bitcoin bulls added leveraged longs using margin and futures markets supported by positive momentum from multiple spot Bitcoin ETF bids, strong institutional inflow and strong momentum. more rational approach by US legislators.

The SEC’s approach to regulation by enforcement is not supported by some US Federal Reserve governors and has faced serious backlash in the US House of Representatives. For example, Representative Warren Davidson introduced the SEC Stabilization Act, citing continued abuses of power and demanding the removal of Gary Gensler as SEC Chairman.

Given the favorable scenario for cryptocurrencies, Bitcoin bulls should now have the upper hand to maintain the $30,000 BTC price support level in the coming weeks.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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