Bitcoin (BTC) is “very close to the bottom” and still commands a bullish long-term view, institutional crypto firm Stack Funds believes.
In its latest report issued on June 23, analyst Lennard Neo said that despite the price meltdown, there was no reason to flip bearish in BTC.
Stack: BTC macro view “remains the same”
The report came the day after BTC/USD plummeted below $30,000 for the first time in six months, only to rebound to current levels above $34,000.
Volatility came thanks to a mining shake-up which, it now appears, will see hashing power transfer en masse from China to other countries.
“Bitcoin, too, closed lower, diving down 28% after failing to break $42,000 late last week. The digital asset has since regained some ground after a short squeeze in prices yesterday and is currently trading around the $34,000 handle,” Stack summarized.
“Our macro view remains the same as we expect Bitcoin to establish ground on further consolidation.”
Neo highlighted an important date coming up in the short term — the Q2 options expiry in the last week of June. Worth $2.3 billion, this should allow for price consolidation once processed.
Options expiry events can pressure Bitcoin beforehand, but as Cointelegraph noted, not every expiry ends up moving the market once it takes place.
“Intensifying the uncertainty is $2.3b end of quarter Bitcoin options, which is set to expire this Friday — partially attributing to the added volatility in the markets,” he added.
“Despite that, we believe most expectations have been priced into the markets, and we should expect a relatively quiet session going into the next couple of days.”
Not all bad news?
Traders may welcome any chance to take stock after the week’s events. In the past 24 hours alone, over $1 billion in positions was liquidated by rapid price moves.
That said, the week prior saw much fewer liquidations of long positions, something Stack attributes to a more “cautious” mood among market participants.
Related: Bitcoin heading for worst quarter since start of 2018 bear market
Against the backdrop of major players such as MicroStrategy stepping in to hoover up the supply at $30,000, there is little left to fuel the skeptics’ views of an apocalyptic market correction.
“Putting all these factors together, we believe Bitcoin is very close to the bottom, at least in this current wave,” Neo concluded.
“We will keep a close eye on Bitcoin’s price post options expiry, and it will be interesting to see how this will unfold in the first week of July, the start of Q3.”
July will also see major funds releases for investors in the Grayscale Bitcoin Trust ($GBTC). After this event, which some argue is adding to selling pressure for Bitcoin, desire to sell should more or less have drained from the market.
Nonetheless, not everyone is convinced that the $28,600 floor seen on Tuesday will be the last of Bitcoin’s bearish turns.
