Bitcoin derivatives data indicates that bulls are preparing for additional upward movement in BTC prices.

Bitcoin (BTC) price held steady at the $30,000 support level following the release of U.S. Consumer Price Index (CPI) data on April 12, which came in lower than anticipated. The official inflation rate for March rose by 5% year-over-year, slightly below the 5.1% consensus forecast. This marks the lowest reading since May 2021, yet it remains significantly above the Federal Reserve’s target of 2%.

The data indicates that inflation is no longer the primary catalyst for Bitcoin’s surge, as investors have shifted their attention from inflationary pressures to potential recession risks, particularly after the banking crisis highlighted the vulnerabilities within the financial system following the Federal Reserve’s year-long increase in interest rates from 0.10% to 4.85%.

In addition to the bankruptcy of Silicon Valley Bank and the government-supported acquisition of Credit Suisse by UBS, various indicators of a macroeconomic downturn have surfaced.

The latest ISM Purchasing Managers Index data has dropped to its lowest point since May 2020, signaling an economic contraction. Federal Reserve documents released on April 12 suggest that the repercussions of the U.S. banking crisis may lead the economy into a “mild recession” later this year. Due to the crisis, some analysts speculate that the Fed may pause further interest rate hikes, although officials have stated that additional measures are necessary to control inflation.

A report from Moody’s Analytics revealed that commercial real estate prices decreased by 1.6% in February, marking the largest decline since the 2008 financial crisis. Additionally, the national office vacancy rate reached 16.5%, reflecting the significant economic challenges that businesses are currently encountering.

Regardless of the reasons behind Bitcoin’s 50% increase between March 11 and April 11, it illustrates resilience against fear, uncertainty, and doubt (FUD), including the SEC’s Wells Notice against Coinbase on March 22 and the CFTC’s lawsuit against Binance and its CEO Changpeng Zhao on March 27. By maintaining the $30,000 support, Bitcoin shows that positive momentum can persist even if inflation remains above 5%.

Bulls are better positioned for the weekly BTC options expiry

Not all participants are celebrating the rally, particularly those traders who have taken bearish positions through Bitcoin options. The open interest for BTC options expiry on April 14 stands at $950 million, comprising $490 million in call (buy) options and $460 million in put (sell) options. Bears have been caught off guard, with fewer than 7% of their positions exceeding $29,000.

Bitcoin options aggregate open interest for April 14. Source: CoinGlass

Below are the four most probable scenarios based on the current price movements. The number of call (buy) and put (sell) options contracts available on April 14 varies according to the expiry price. The imbalance favoring each side represents the theoretical profit:

• Between $28,000 and $29,000: 2,600 calls vs. 1,800 puts. The net outcome is balanced between call and put options.
• Between $29,000 and $30,000: 6,700 calls vs. 500 puts. The net result favors the call (buy) options by $110 million.
• Between $30,000 and $30,500: 8,500 calls vs. 200 puts. Bulls extend their advantage to $250 million.
• Between $30,500 and $31,500: 11,300 calls vs. 100 puts. Bulls’ advantage grows to $350 million.

This rough estimate considers only call options in bullish positions and put options in neutral-to-bearish trades. However, this simplification does not account for more intricate investment strategies. For instance, a trader might have sold a put option, thereby gaining positive exposure to Bitcoin above a certain price, but this effect is challenging to quantify.

Related: Bitcoin-friendly PPI data boosts bulls as Ether price fights for $2K

Bears are unlikely to reverse their situation

Bulls are anticipated to drive Bitcoin above $30,500 on April 14 at 8:00 a.m. UTC to secure an additional $100 million in profits. Conversely, bears would need to push Bitcoin’s price below $29,000 to balance the situation. However, bears have recently incurred substantial losses, with BTC futures short contracts liquidated amounting to $128 million between April 9 and April 11.

As the most likely scenario favors Bitcoin bulls, their profits will likely be utilized to reinforce the $30,000 support. Bears may consider regrouping and awaiting further actions from regulators, as the current macroeconomic environment is favorable for supply-capped assets.

The views, thoughts, and opinions expressed here are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making any decisions.