As Bitcoin approached the $70,000 level on Monday morning, analysts at Bitfinex issued a cautionary note, suggesting that the rally could be short-lived due to the imminent expiration of important options.
Bitfinex analysts predicted in a note that they expect “potential additional downward pressure” on the price of Bitcoin (BTC) as the monthly expiration of around $2.2 billion is scheduled to occur on August 2.
They point out that this event could cause Bitcoin to pause or even pull back slightly from the resistance area of $68,000 to $69,000. Despite the risk of a pullback, analysts stress that leveraged long positions are currently more influential than spot market activity.
“Therefore, while the market is in a steady uptrend on a higher timeframe, a short-term price decline or range is likely to occur, and if the options market situation is any indication, directional trades, especially those that rely on leverage, should be avoided,” Bitfinex noted.
On Monday morning, Bitcoin briefly traded at $70,000, a level not seen since June 7, before losing all momentum and trading below $67,000 by the afternoon trading session.
The broader macroeconomic environment
Regarding the broader macroeconomic environment, Bitfinex analysts described the economic outlook as “cautiously optimistic.” They stressed that the housing market remains a “drag on growth” due to higher-than-expected median home prices weighing on existing home sales.
As crypto.news previously reported, July has been a historically positive month for Bitcoin. This year, the cryptocurrency has gained more than 15% in the past 30 days and has recorded more than $19 billion in inflows since the start of the year, a new record. CoinShares data shows that Bitcoin products received nearly $520 million in capital between July 22 and July 26, pushing Bitcoin inflows past the $3.6 billion mark for the year.
