Bitcoin price opened the week with a strong push to $66,300, but will the bulls be able to sustain the current momentum? Over the past seven months, the majority of Bitcoin price advances have been capped at overhead resistance, the most recent being the $65,000 to $66,000 level where the price has yet to secure a daily close. Today’s price surge puts Bitcoin in a similar scenario where the descending channel trendline was briefly breached but it remains to be seen whether Bitcoin will close the day firmly above the channel resistance level.
Similar to previous rallies, the price rally was driven in part by futures markets, and the activity is easy to spot by the surge in funding rate and open interest that accompanied Bitcoin’s rally to $66,300 as short traders became forced buyers.
While discussing the day’s price action with JJ, Head of Crypto Options and Derivatives at HighStrike, the analyst said:
“Bitcoin has surged after a break above the 200-day moving average has sparked renewed interest from options buyers in the options market. The most popular of these options have been the 75-100K options for Q4 this year, noted Kelly Greer of Galaxy Digital.”
Options nerds are holders of 75k-100k put options (red bars). Most of them are in December, some in October and November as well. About 70k open interest across those trades on Deribit. The buying gained momentum late last week when Twap sellers slowed down, which is evident in implied volatility and skewness.
JJ explained that in his view, “There are several narratives fueling the bullish price action, and the most popular ones seem to be the Trump odds on Polymarket rising to levels not seen since July when BTC last touched $70,000, and the recent breakout to MicroStrategy’s (MSTR) new year highs.”
When asked whether today’s rise above $66,000 represents a definitive change in trend, JJ cautioned that “resistance above the September highs remains as Coinbase’s order book has large orders stacked above.”
“Although the stars are aligning for a fourth-quarter rally to new record highs, participants still expect a range-bound market with liquidity sweeping to the downside as long as these demand walls remain.”
This article does not contain investment advice or recommendations. Every investment or trading move involves risks, and readers should conduct their own research when making a decision.
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