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Bitcoin Is Short-Term Bearish, Trader Says

January 28, 2021 at 16:12 by Ibrahim Anifowoshe

As Bitcoin continues to test the $30,000 support area, a trader popularly known as the “Byzantine General” has said that Bitcoin is short-term bearish as the options market hints at consolidation.

The trader noted that the price action of Bitcoin is not bullish despite the price of BTC staying above a key support level.

In the midst of all this chaos, here’s a bitcoin chart. Not much to do. It’s bearish no matter how you look at it. But we’re sitting on support, so no swing short opportunity either… It’s just waiting now. > YO needs to hold.

The option market is short-term bearish

It does not seem like only the trader is of this opinion. Analysts have noticed a similar trend from the options market and the previous fractals of Bitcoin. A candle chart that reveals the patterns that analysts use to compare current and previous cycles of an asset price are known as fractals.

traded instruments in the last 24 hours

According to Laevitas, a data analytics company, the options market exhibited a short-term bearish outlook. The analysts said:

As Bitcoin consolidation continues, put/call ratio on @DeribitExchange is at 2 today. In last 24h, seeing decent buy volume on 26MAR 9000p, 13000p and 14000p. Options market is signaling a short-term bearish view.

The options market has a strong hold on the BTC market now than before. There is no ignoring the open interest which is hovering above $3 billion. There are also more active options contracts and options traders in the market. It would be detrimental to the price of Bitcoin if those selling are coming from the options market.

Miners position index

It is possible that one of the reasons why the price of BTC has continued to range and stagnate is the high selling pressure coming from miners.

cryproquant position index chart

According to data from CryptoQuant, the Miner’s Position Index is high, showing that miners are selling or depositing their bitcoins to exchanges. With miners playing a key role in the selling pressure of Bitcoin, a high Miner’s Position Index usually leads to a sell-off.

On Jan. 26, CryptoQuant CEO Ki Young Ju said:

BTC Miners’ Position Index hit the 8-year high. They’ve been moving an unusual amount of Bitcoins lately. It seems they’re continuously realizing profits since 42k. This is one of the reasons why I keep my bearish bias.

For now, a $34,000 resistance level is the key area for the foreseeable future. If the options market continues to lean toward the bearish short-term trend and the miners continue to sell, Bitcoin is unlikely to break new highs in the near future.

If you have any questions and comments on Bitcoin today, use the form below to reply

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