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BTC Price Analysis: Bulls Face Headwinds After Correction to $58,500 Amid Rising Open Interest in Bitcoin Options

  • BTC regained some positive traction after profit-taking weighed on risk sentiment
  • A break of $58,000 might exacerbate the fall where it found firm support at the end of October
  • Bitcoin Options markets presently have over $12.6 billion in open interest

After record highs of $69,000, Bitcoin (BTC) fell as volatility led to short-term spikes, traders secured long positions. However, BTC regained some positive traction after profit-taking weighed on risk sentiment and placed more pressure on the lead cryptocurrency. At the time of this post, bulls face headwinds after correction to $58,500 intraday low as BTC/USD hovers beyond the $60,000 psychological level. A break of $58,000 might exacerbate the fall where it found firm support at the end of October, and considering how difficult it has been to make significant gains since then, it could be the trigger for a further drop. Nonetheless, Bitcoin Options markets presently have over $12.6 billion in open interest, as per data from blockchain analytics and intelligence startup Glassnode, which is around all-time highs. Option OI has been at this level for about a month, similar to highs seen in March and April 2021. If open interest rises in lockstep with volume and price, this could signal the start of a bull trend.

Key Levels
Resistance Levels: $70,000, $67,000, $63,000
Support Levels: $57,000, $54,000, $50,000

BTC/USD Daily Chart: Ranging

BTC/USD Daily Chart

BTC/USD has recovered in the session, attracting new buy orders after hitting a low of $58,500, last seen in October 2021. The pattern of higher highs and higher lows stays unchanged, notwithstanding the recent correction lower. The pair is also trading above its 50 and 200 moving averages (MAs), which crossed in September in a ‘golden cross.’ As a result, the outlook remains positive.

The Relative Strength Index (RSI) indicates the most recent price rally and is striving to exit bearish territory by crossing above its midline 50 going higher. It shows that the downward trend is slowing. If buyers regain grip and breakthrough $61,500, the next opposition might be around the $63,000 mark. Another upside rejection might return the outlook to neutral, allowing a test of $57,000 to occur.

BTC/USD 4-Hour Chart: Ranging

BTC/USD 4-Hour Chart

BTC/USD came back swinging after its Tuesday’s retreat, crossing above the $60,000 handle. However, this positive momentum might be short-lived as the pair is currently trading below its short-term moving averages (MAs 50 and 200), signaling a market under pressure. Despite the mixed signals, the short-term oscillator is transmitting a positive bias, reflecting the recent price appreciation of the pair.

The Relative Strength Index has increased above its 20 oversold mark while presently heading above the 40 mark. If the bulls maintain their lead, an initial resistance is at $61,500 and $63,000. If the price falls below the congested zone, including the $58,800 intraday low, bears may target the $57,000 horizontal support. In summary, the technical outlook is cautiously optimistic. Bears will need to break here to alter the trend.

Note: Kryptomoney.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results

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