Following the 3% Spike, Bitcoin Eyes Huge Resistance Area Next (BTC Price Analysis)

Despite the fact that the consolidation phase has been quite long over the last few weeks, options traders and the on-chain metrics are still showing uncertainty. Both the stock market and cryptocurrency are being affected by the fear at the macro level.

Options Market Analysis

On Friday, January 21st Bitcoin options contracts worth $538 million will expire on Deribit. This expiry will be the worst case scenario, with the price at $43K. The highest open interest is in calls for the strike price of $44K. The highest open interest is found in the put option with a $39k strike price.

Since January 11, open interest in 21Jan_44k_C has increased, with most call buyers. Top Instrument OI changes show that call option traders with $48K strike prices were not optimistic about a rise in the price above this strike ($48K) for this expiry.

Source: Deribit


Technical Analysis

The cryptocurrency market is experiencing a lot of uncertainty due to fear at the macro-level. The BTC price was stable at $40K but consolidation is continuing at $40K-$43K. Many participants believe we are entering a bearish market.

Others believe the bull run isn’t over yet. Technical indicators can be used to predict future trends and help us see the past. The Ichimoku cloud is one of these indicators. Tenkan-sen, the conversion line, crossed through Kijunsen (baseline), in November on the daily frame. This indicates that the price is falling. DMI indicates that a downtrend is confirmed when -DI moves above +DI.

For the past few weeks, the $40K-$42K area acted as a solid support. Tenkan-sen must rise above the Kijunsen and +DI>DI in order for bitcoin to reach higher prices. Otherwise, the $40K-$42K price level will be tested once again.

Source: TradingView

Analyse of the Short-Term

Since December, Bitcoin had been moving in a downward channel on the 8-hour frame. The channel was opened on 12 January. The chart shows that the pullback occurred in the same time frame as the green level which acted as support. The lower Bollinger band supported the RSI simultaneously. Bitcoin is currently trying to test the $44K red level resistance. The chart shows possible resistances.

Source: TradingView

Onchain Analysis

The Net Unrealized Profit/Loss is one of the most well-known metrics on-chain that can help map the “Fear”. It denotes the total profit/loss in a ratio.

This metric measures the value of an investor’s profit ratio. A rising trend in value indicates that more investors are becoming profitable, while a decreasing strand means that there is a growing number of participants who are underwater. The NUPL currently stands at 0.35, which is the same level as the market in July 2020. This is the perfect explanation for analysts’ apparent uncertainty.

Source: CryptoQuant

@N_E_D_A prepared the technical analysis and market review.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the””  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.

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