- Post the US announcing the further raise of its debt ceiling, the BTC price has managed to hold strongly above $27,000.
- The Bitcoin put/call ratio has also been on a decline post the US debt deal, showing a drop in the bearish sentiment.
The world’s largest cryptocurrency Bitcoin (BTC) is showing strong resilience against the broader market expectations of further selling ahead. Over the last weekend, the BTC price managed to hold strongly above $27,000 with subdued volatility.
However, it’s taken a 1% dip in the early trading hours of Monday, June 5, trading at $26,862 as of press time. Market analysts believe that Bitcoin and the broader crypto market will continue to consolidate ahead this week and until the next FOMC meeting on June 14. In a note to CoinDesk, BitBull Capital’s Joe DiPasquale wrote:
“We had been expecting a correction and consolidation between $25K and $27K levels, and that’s what we have been witnessing over the last month. While we haven’t had a major test of $30K, another attempt of the key resistance level would not be surprising.”
Mark Connors, head of research for digital asset manager 3iQ, also noted that the digital market continues to thrive despite the regulatory headwinds in the US. Last month, Bitcoin and crypto did come under selling pressure over concerns of US debt default. However, the US Senate reached a decision last week to further raise the debt ceiling. This has reduced some selling pressure on digital assets.
“With equity and debt markets wondering how much the U.S. Treasury’s renewed debt issuance will impact liquidity and thereby market prices, digital assets are taking matters into their own hands,” said Connors.
Bitcoin On-Chain and Technical Indicators
Soon following the US debt deal last week, the Bitcoin put/call ratio is on a decline. The BTC put/call ratio is currently at $0.50, down from 1.34 at the beginning of the month. This metric is usually prone to rise when the bearish sentiment in the market increases.
When someone buys a put, it means they have the option to sell an asset at a specific price. On the other hand, buying a call gives the option to buy the asset. The relationship between the two can tell us how investors are feeling, especially when it reaches high or low levels.
We can measure the number of puts and calls bought in the past 24 hours. If the number is above one, it suggests a negative sentiment, while a number below one suggests the opposite.
Recently, there has been a decrease in traders buying puts, which means fewer people are looking to protect themselves against future price drops. However, there was a sudden increase in protection towards the end of the previous month, likely due to concerns about the debt deal agreed upon by US lawmakers.
On the downside, the biggest support level for Bitcoin could be $26,360. There’s been heavy buying in the range between $26,360 and $27,160.
— Ali (@ali_charts) June 4, 2023