The recent plunge in cryptocurrency markets has been caused by fear at the macro-level (risk of off) over the past weeks. This analysis will examine the bitcoin price from the Technical and Onchain perspectives. We also discuss possible scenarios in the near and long-term.
It is possible to see how the price evolves organically into a larger corrective system after the initial bullish impulse phase. A few swing highs or lows are visible, which help to identify a corrective structure.
The bigger picture shows that the BTC price made an ascending channel and a Head and Shoulders pattern in the area of the all time high (November 10, 2021), which provided us with a sell confluence.
The BTC price has been trending down since November with shorter time frames for corrections. We haven’t seen the swing lows before, which could cause a consolidation that pushes the price to the higher time frame (HTF lows) and completes the pattern.
It is important to monitor whether there are any positive reversals in price action until the price reaches its bottom region (marked with the orange line on this chart). These confirmations will help determine if the price is able to resume a bullish leg.
Analyse of the Short-Term
The following 4-hour chart shows that the price is clearly in a downtrend. This trend started when BTC hit ATH at $69K.
As a significant resistance, the marked ascending trendline has been in place. Bitcoin faces many resistance levels as it climbs to reclaim the $40-50K range. Bitcoin must form a higher high pattern in order to bounce back and initiate a new rally.
If bears persist, the next support level is the lower time frame’s previous low, which is the $30K area.
The rising Derivative Exchange Reserves was one of the indicators that a bearish momentum would be back in Q4 2021.
The spot exchange reserves have been in a long term depletion. This contradiction means that dips were quickly bought and withdrawn from the Spot markets. It is clear that we are currently in an accumulation phase. This is bullish for both the medium and long term.
Options Market Analysis
Deribit will be ending approximately $2.1B worth bitcoin options contracts on Friday, January 28th. This is the most important month-end expiry.
The maximum pain price is $42K and the P/C Ratio of 0.5. Options traders bought and sold puts to protect against any potential downside from the Fed’s meeting on Wednesday at 19:30 UTC. The P/C Ratio has risen since January, which indicates a bearish sentiment within the options market.
Marla Brooks – Financial Analysis
My name is Marla Brooks, and I am the mainstream behind the”observednews.com” for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.