Bitcoin Finally Wakes Up

Bitcoin finally breaks away from trading sideways. There was hope that a strong move would result from low volume in these times of uncertainty. As of time of writing, Bitcoin experienced a small pump to $10,922. This puts an end to the $10,800 resistance level we’ve seen in the past week. Now, bitcoin will continue to test further resistance levels and the big one to look out for is $11,000.

Bitcoin daily chart Source: TradingView

This chart shows us the situation bitcoin found itself in. It had to move somewhere but no one knew to which side. Now that we have a move we’llsee if buying pressure can keep bitcoin above $10.9k or if this was another classic case of a bull trap.

Before the move, we have seen investors place major bets on bitcoin’s breakthrough using CME’s futures contracts. According to Skew, the CME traded $48 million worth of options, the highest daily volume sine July.

CME bitcoin options volume Source: Skew

Traders took $14,000 and $16,000 strike prices and $18,000 and $20,000 strike prices for the December 2020 and March 2021 expiry contracts. Vishal Shah, founder of derivatives exchange Alpha5, says that this is a sign of “strategic gearing for the topside”.

Traders likely bought call options at $14,000 expiring in December and simultaneously sold December expiry calls at $16,000. Similarly, calls expiring in March 2021 were bought at $18,000 and sold at $20,000. Traders use bull call spreads when they expect the asset to chart a limited rally in the short-term.

This information tells us that traders predict a rally but think that it will only reach $16k until the end of December. They also believe that prices will remain below $20k until the end of the first quarter of 2021.

As mentioned, bitcoin broke out of the resistance level but needs to break $11k next in order to end the pullback from August’s high of $12,476. If bulls can keep a consistent level of at least $10.8k then the pullback can end and a climb towards new highs can begin.

--

--

--

Cryptocurrency Research

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Stacks price falls precipitously after gaining 70% in a single day — more STX losses ahead?

Stacks price falls precipitously after gaining 70% in a single day - more STX losses ahead?

How to Claim Your Airdrop through the https://www.teaswap.art​ 3.0 website

Cash turnover hits record high in the U.S. and altcoins mentions on Twitter drop to a minimum

Marketing your Moonshot Cryptocurrency

King Speed welcomes Kyros Ventures as our strategic partner

The London Stock Exchange Group has paid $325 million for the fintech firm TORA

The London Stock Exchange Group has paid $325 million for the fintech firm TORA

Retire Token, A Low Supply — High Rewards Token , to List on BitMart Exchange

Mushing Mammoths Campaign

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Tecuani Capital

Tecuani Capital

Cryptocurrency Research

More from Medium

The Real Source of Inflation

Fear & Greed Index | Friday — March 30th, 2022

Fear & Greed Index for March 30th, 2022 (from CNN) [2]

Traders Prepare for Fed Rate Rise as Global Government Bonds Drop

A stock trader speaks on phone