Over the past two months, Bitcoin (BTC) has respected an ascending triangle formation, bouncing multiple times from its support and resistance lines. While this might sound like a positive, the price is still down 11% year-to-date. As a comparison, the Bloomberg Commodity Index (BCOM) gained 29% in the same period.
Bitcoin/USD 1-day chart at FTX. Source: TradingView
The broader commodity index benefited from price increases in crude oil, natural gas, corn, wheat and lean hogs. Meanwhile, the total cryptocurrency market capitalization was unable to break the $2 trillion resistance level and currently stands at $1.98 trillion.
In addition to 40-year record high inflation in the United States, a $1.5 trillion spending bill was approved on March 15, enough to fund the government through September. Worsening macroeconomic conditions pressured the supply curve, which, in turn, pushed commodities prices even higher.
For these reasons, cryptocurrency traders are increasingly concerned about the U.S. Federal Reserve rate hikes expected throughout 2022 to contain inflationary pressure.
If the global economies enter a recession, investors will seek protection in U.S. Treasuries and the U.S. dollar, itself, moving away from risk-on asset classes like cryptocurrencies.
Bulls placed their bets at $100,000 and higher
The open interest for the March 25 options expiry in Bitcoin is $3.34 billion, but the actual figure will be much lower since bulls were overly-optimistic.
These traders might have been fooled by the short-lived pop to $45,000 on March 2, as their bets for March 25’s options expiry extend beyond $100,000.
Even Bitcoin’s recent rally above $42,000 took bears by surprise because only 16% of the bearish option bets for March 25 have been placed above this price level.
Bitcoin options aggregate open interest for March 25. Source: CoinGlass
The 1.75 call-to-put ratio shows more sizable bets because the call (buy) open interest stands at $2.13 billion against the $1.21 billion put (sell) options. Nevertheless, as Bitcoin stands near $42,000, most bearish bets will likely become worthless.
For instance, if Bitcoin’s price…