Bitcoin’s (BTC) price surged by 9.6% in just 24 hours on April 26, breaking above $29,800 and reaching a new high of $30,024 on Bitstamp.
While some commentators suggest that First Republic Bank’s 50% share drop on April 25 triggered Bitcoin’s rally, the cryptocurrency’s price remains down by 22.5% in the past 12 months, leaving bulls cautious.
First Republic Bank’s earnings report revealed a significant decrease of 40.8% in clients’ deposits during the quarter as customers withdrew their funds. The bank received a $30 billion cash injection in March, but quarterly outflows were over $100 billion.
The bank’s struggles highlight the risk of a weaker economy and a bearish market for assets such as Bitcoin, especially after the US Federal Reserve signaled that it would hike interest rates above 5% to tame inflation.
Another factor that may have contributed to Bitcoin’s recent resistance at $31,000 is the increasingly stringent regulatory environment for cryptocurrencies, especially in the US.
Coinbase’s legal action to force the Securities and Exchange Commission to clarify industry rules has further underscored the need for regulatory clarity.
Despite these challenges, Bitcoin bulls are optimistic about the April $3.2 billion monthly options expiry. The gains of 27% between March 26 and April 26 have boosted bullish sentiment, and the current open interest for the April 28 options expiry is $3.2 billion.
The call-to-put ratio of 1.19 reflects the imbalance between the $1.7 billion call (buy) open interest and the $1.5 billion put (sell) options. If Bitcoin’s price remains near $29,500 at 8:00 am UTC on April 28, only $54 million worth of these sell options will be available, as the right to sell Bitcoin at $28,000 or $29,000 is useless if BTC trades above that level on expiry.
