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- Bitcoin's June: $24,000?
Bitcoin's June: $24,000?
READ TIME: 4 min.
Gm🌤️
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Ready for the dish of the day? Let's dive in:
A good week for everyone in the market
Why bitcoin may tank to $24,000 in June
The U.S. debt ceiling and bitcoin
📈 MARKETS
| This Week | This Year | ||||||
| $27,210 | ▲ 3.4% | ▲ 64.5% | |||||
| $1,874 | ▲ 4.1% | ▲ 56.7% | |||||
| 12,935 | ▲ 3.6% | ▲ 22.5% | |||||
| 4,180 | ▲ 1.6% | ▲ 8.5% |
Thanks to the buzzer beater resolution of the debt ceiling crisis, both crypto and the stock market saw a big increase this week.
But this week’s highlight was most definitely NVIDIA, which soared by more than 30% this week alone, thanks to the AI boom.
DONUT HOLES
Hole lot of news…
Twitter is now worth 1/3 of what Elon Musk paid for
NVIDIA briefly joins the $1 trillion club. And it's totally eyeing Netflix's "N" spot in FAANG.
Gate.io denies rumors of withdrawal issues
Multichain team can’t contact its CEO Zhaojun
Artificial intelligence could lead to extinction, experts warn
BITCOIN
Why bitcoin may tank to $24,000 in June
Deribit
Bitcoin's been as thrilling lately as watching grass grow, hardly wiggling a smidge for weeks. But it may be going for a dive to $24K in June. Puzzled? Let us introduce you to the world of options trading, and the max pain price.
What is options trading?
Think of options trading as the casino of the investment world, with two key players: call options and put options.
A call option gives the right (not obligation) to buy an asset like bitcoin at a set price (aka strike price) by a certain date. If Bitcoin's price skyrockets past the set price, you profit by buying cheaply. Conversely, a put option allows you to sell at a fixed price. If Bitcoin nosedives below this, you profit by selling high.
You can learn more about options here.
How does this predict price movements?
Now, time for the star of the show: The "max pain price". As its name suggests, it’s the strike price where both call and put option holders would lose the most when their options expire.
Now, the max pain theory suggests that the asset price gravitates toward this max pain price as expiry day looms. This is because for the big market makers who provide these options contracts, the retail investors’ max pain price is their max gain price.
Why should you care?
Per Deribit, the biggest of bitcoin derivatives exchanges, bitcoin max pain price in May was around $27,000, and it’s price on the 31st was almost spot on at $27K. Now, June's max pain price is currently sitting at around at $24,000. Will bitcoin play along again this time? Nobody knows, but it sure adds some salsa to the mix!
Remember, navigating the crypto market is like riding a rollercoaster, and the max pain price is just one twist in the ride. Don’t over-rely, but just take it with a grain of salt.
WEB2
The U.S. debt ceiling and bitcoin
What's this debt ceiling everyone's talking about?
Well, it's basically how much money the U.S. government can borrow to cover its spending. Right now, that cap is at a whopping $31.4 trillion. But the spending tab's been running up with things like military expenses, social security, and Medicare payments, and many more. And Uncle Sam was on the brink of maxing out his card in a few days.
Fast-forward to May
Upping the debt ceiling needs Congress's thumbs-up. But with the Republicans - the party playing defense - holding the majority, it was on the Biden crew to win them over. Except, that didn't work out so easily for weeks. The big fear was that if the US couldn't pay its bills, it'd crash the economy - 2008 all over again, or even worse.
But, breathe easy folks, things took a positive turn today. Congress managed to push through a vote, and we've dodged that debt ceiling bullet.
Did Bitcoin feel the heat?
Well, when the US debt ceiling drama kicked off, Bitcoin, like most assets, took a hit. Our digital gold was trying to break past the $30,000 mark, but slipped to $26,000. Macro issues like US interest rate hikes and debt ceiling drama tend to shake Bitcoin's price. But, let's be clear, Bitcoin's still sticking to its historical patterns.
What's cooking internally for Bitcoin? As we've talked about before, Bitcoin's got its own stuff to deal with that could influence its price more than macro indicators. So, all this chatter about the outside world might just be noise. Maybe it's time we turn down the external buzz and tune into Bitcoin's internal beats.
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🐦 TWEET OF THE WEEK
One of us! One of us!
— Crypdonuts (@crypdonuts_news)
1:44 AM • Jun 1, 2023
Even the most skilled traders on Wall Street can’t always be right. Be patient, and play it safely!
Alright, that's a wrap for now 🙌. If you made it to here, let us know by voting below. Catch you next Thursday!
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