Bulls’ domination over bears has pushed Bitcoin price to hold above the key $106K support level, with the price hitting an intraday high of $108,300. While risks and headwinds persists for Bitcoin price, analysts believe the rally would continue.
Major Headwinds of Bitcoin Price Rally
The recent fluctuations in Bitcoin price, combined with notable changes in open interest, indicate a need for traders to exercise caution.
Binance Open Interest Reaches Historical Profit Booking Areas
As per a CryptoQuant on-chain analysis, Binance open interest (OI) hit 6% for the third time in two months. This pattern historically coincided with areas of profit-taking.
The recurring pattern suggests that large inflows into leveraged positions often follow periods where short-term gains are realized. This leads to potential price pullbacks or sideways movement.
Sharp Decline in Long-Term Holder (LTH) Net Position Realized Cap
LTH Net Position Realized Cap metric indicates Bitcoin held by long-term investors plummeted from over $57 billion to just $3.5 billion. This indicates profit booking by long-term holders.
It’s important to note that the decline in LTH holdings and the repeated OI spikes suggest heightened market activity. However, they do not necessarily confirm an imminent Bitcoin price drop.
$15 Billion in Bitcoin Options Expiry
As per Deribit, over 139K BTC options contacts with a notional value of more than $15 billion are set to expire on Friday. This is one of the largest options expiry this year.
At the time of writing, the put-call ratio was 0.74, indicating a slightly bearish sentiment among traders.
Moreover, the max pain point is at $102,000, indicating a high chance of correction in Bitcoin price. Traders may adjust their positions, which can lead to increased volatility.
Bitcoin Miners Revenue Falls
Bitcoin miners just saw their worst payday in a year, according to a CryptoQuant research on June 26. Daily revenue slipped to $34 million in June, the lowest since April, with low fees and Bitcoin price drop are eroding margins.
Bitcoin miners haven’t sold their BTC holdings yet. However, capitulation and loss risks could cause some miners to sell some BTC.
US PCE Inflation Data Release
The U.S. Bureau of Economic Analysis to release the U.S. Federal Reserve’s preferred inflation gauge, US PCE inflation data on Friday.
Economists expect the headline PCE to come in at 2.3%. Whereas, the month-over-month PCE inflation is forecasted to rise 0.1%, the same as in the previous month.
The annual core US PCE inflation is expected to come in hot at 2.6% and the monthly core PCE expected to rise 0.1%.
US Federal Reserve Chair Jerome Powell and other FOMC members warned about an uptick in inflation to 3% by the end of month. They have cited tariffs and recent Israel-Iran conflict are reasons for rising inflation.
During the latest congressional testimony, Powell denied monetary policy changes and rate cuts early this year.
Analysts Eye Further Rally in Bitcoin Price
Renowed Bitcoin analyst PlanB pointed out that Bitcoin approaching RSI of 70. Traditional investors may see get worried that BTC is overbought.
However, Bitcoin investors consider RSI range of 40-90 as normal. He said “So RSI 70 is only slightly above the average (65).”
Michael van de Poppe expected a breakout in Bitcoin price. He said:
BTC price fell 1% in the past 24 hours, with the price trading at $106,722. The 24-hour low and high were $106,680and $108,305, respectively.
Furthermore, the trading volume has decreased by 10% in the last 24 hours, indicating a decline in interest among traders.
