Following a steady weekend, Bitcoin maintains the $42K range. Considering the options market strike prices and the technical analysis, bitcoin is expected to fluctuate in the $40K – $47K range in the next short term. Onchain data shows that long-time holders recently slowed down their selling pressure, and it seems that BTC is under consolidation.
Options Market Analysis
Since last month, the bitcoin price has been consolidating in the $40-42K range. Looking at the options market, a huge trade consists of buying calls for a $40K strike price and selling calls for a $60K strike price (bull call spread) for the 24JUN2022 expiration date.
This trade increased the open interest rate for this particular expiry date. It seems that the $40K level is becoming a significant support level in the options market as well.
Technical Analysis
Bitcoin has been trading in a downtrend after reaching its new ATH of $69K in the first half of November 2021. On a 4-day time frame, bitcoin lost the 14 EMA as dynamic support, and struggled to break above the 14 EMA on 27 of December.
Since then, this exponential moving average (EMA) has turned into a tough resistance line. It seems that bitcoin will attempt to break above this key EMA over the next coming days.
Therefore, there are two important resistance levels for an immediate price recovery; The Ichimoku cloud – ~$46K – and the 14 EMA at ~$44.7k. Additionally, the DMI indicator -DI (red line) is still above +DI (green line). An ascending trend is usually confirmed when +DI > -DI.
Short-Term Analysis
Bitcoin broke out of a descending channel on the 21st of December in the 4-hour time frame. BTC could not break above $52K, and then the price quickly dropped.
This caused bitcoin to turn back into the channel and find support by the $40K level once again. For the second time, bitcoin broke out the descending channel.
Based on Fibonacci retracement levels, the 0.382 and the 0.236 levels acted as resistance and support respectively. In order to move higher over the next short-term, bitcoin needs to break above 0.382 Fibonacci level, which lies at $44.5K.
Onchain Analysis
Binary Coin Days Destroyed is a binary value. If Supply-Adjusted Coin Days Destroyed is larger than the average Supply-Adjusted CDD, Binary Coin Days points to ‘1.’ If not – it points to ‘0’.
This metric shows whether long-term holders’ movements are higher or lower than the average. Since the last leg down to the $40K-$42K range, the intensity of BCDD = 1 has decreased. This means that the long-time holders are not spending their coins at a high pace.
The technical analysis has been prepared by @N_E_D_A
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