Bitcoin price faces challenges in maintaining levels above $30K due to regulatory ambiguity.

On April 18, Bitcoin (BTC) price regained the $30,000 support level after a brief dip to $29,130 the day prior. Nevertheless, traders are skeptical about the sustainability of this recovery due to heightened regulatory scrutiny, particularly in the United States.

Bitcoin price in USD, 4-hour. Source: TradingView

On April 14, Rostin Behnam, the Chairman of the Commodity Futures Trading Commission (CFTC), stated that Binance deliberately violated U.S. regulations regarding futures and commodities trading. This includes knowingly permitting U.S. citizens to engage on the platform using obfuscation tools. His remarks were in response to the CFTC’s lawsuit filed on March 27 against Binance and its CEO Changpeng “CZ” Zhao for alleged trading infractions.

Also on April 14, during an open meeting with U.S. Securities and Exchange commissioners and staff, SEC Chair Gary Gensler indicated that the agency would revisit the proposed redefinition of an “exchange.” The SEC aims to impose additional regulatory scrutiny on certain brokers and explicitly include decentralized applications.

On April 17, the U.S. Securities and Exchange Commission (SEC) filed charges against the crypto asset trading platform Bittrex and its former CEO William Shihara for operating an unregistered securities exchange, broker, and clearing agency. Additionally, Bittrex Global is facing charges for managing a shared order book with Bittrex.

Bittrex had previously announced plans to cease U.S. operations on April 30 after reportedly receiving a Wells Notice in March warning of forthcoming regulatory actions.

Other countries are taking different approaches

The regulatory landscape in Hong Kong appears to have improved following the onboarding of crypto companies by state-affiliated banks in China. Alongside the Bank of Communications, ZA Bank — the largest virtual bank in Hong Kong controlled by a Chinese internet insurer — will also serve as the settlement bank for certain crypto firms.

A report from the Wall Street Journal indicates that these banks will function as settlement banks to facilitate token deposits at authorized exchanges, allowing withdrawals in Hong Kong dollars, Chinese yuan, and U.S. dollars.

On April 12, Argentina’s securities regulator approved a Bitcoin-based futures index. This regulated derivatives contract will provide qualified investors with a secure and regulated means to gain exposure to BTC. All transactions will be settled in the national fiat currency, with traders required to deposit Argentine pesos via bank transfer.

To gain insight into how professional traders are positioned, it is essential to analyze the options markets.

Options traders are leaning toward bearish structures

Market sentiment can be assessed by evaluating whether there is more activity in call (buy) options or put (sell) options. Typically, call options are associated with bullish strategies, while put options are linked to bearish ones.

A put-to-call ratio of 0.70 suggests that the open interest in put options is lower than that of call options. Conversely, a ratio of 1.40 indicates a preference for put options, signaling a bearish outlook.

BTC options volume put-to-call ratio. Source: Laevitas

Since April 5, Bitcoin’s put-to-call ratio has been either balanced or skewed towards protective put options. The current ratio of 0.60 indicates a slight preference for neutral-to-bearish option strategies, although this is not particularly unusual.

To further confirm whether traders have adopted a bearish stance, it is also important to examine the Bitcoin futures markets.

Bitcoin futures metrics remain neutral-to-bearish

Bitcoin quarterly futures are favored by whales and arbitrage desks. These fixed-month contracts generally trade at a slight premium to spot markets, suggesting that sellers are requesting more funds to postpone settlement for an extended duration.

Consequently, futures contracts in healthy markets should trade at an annualized premium of 5% to 10% — a condition referred to as contango, which is not exclusive to crypto markets.

Related: Bitcoin ‘mega whales’ send BTC price to $30K as volatility hits crypto

Bitcoin 3-month futures annualized premium. Source: Laevitas.ch

The chart illustrates that traders have maintained a neutral-to-bearish outlook over the past two weeks, with the basis indicator fluctuating between 2.4% and 4.3%. This trend is not surprising given that Bitcoin’s price remains 56% below its all-time high of $69,000.

Bitcoin’s margin and futures markets reflect a neutral to bearish sentiment, but nothing extreme. The decline in demand for bullish strategies likely mirrors the 50% increase in Bitcoin’s price since March 11.

However, concerns regarding regulatory actions may dampen demand from both retail and institutional clients, so without further clarity on this matter, the likelihood of Bitcoin surpassing $31,000 remains low.

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

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.