The bullish momentum that has propelled Bitcoin (BTC) prices to year-to-date highs has continued into its third week as prices approach $35,000.
Some noteworthy developments supporting the current bullish momentum include:
- On the daily time frame, a golden cross forms between the 50-day moving average and the 200-day moving average.
- Liquidity maps from DecenTrader and Kingfisher highlight that if Bitcoin price manages to break above the $36,300 level, a short squeeze could occur between $36,300 and $40,000.
Liquidity remains abundant #bitcoin Prices currently go all the way up to $39,500.
Track it here: pic.twitter.com/2i09F7Z9We
— Decentrader (@decentrader) October 26, 2023
- Options market data highlighted shifts in investor sentiment and positioning.
Bitcoin’s options data appears to be consistent with the view that further price gains are possible and suggests that last week’s gamma event could be extended, with Bitcoin eventually rising to $35,280. The data also shows that a gamma event may occur in the $35,000 to $40,000 range, and investors’ positions have changed accordingly.
Daily options trading volume in derivatives markets has surged over the past week, with The Big Picture podcast host Joe Kruy saying:
“Paradigm had its best day ever in terms of volume, up 70%.”
Kelly Greer, head of US sales at Galaxy, adds to conversation about Bitcoin options market explain:
“The flows we are seeing reflect everything stated here and market conditions in the listed space. Interest in the call options that we have been highlighting has increased month over month from the third quarter into the fourth quarter, and when we began to highlight this short-lived The significant divergence between Bitcoin and ETH in early October was actually the first time we started talking about this. Once we got the spot breaking out of its range and seeing the catalyst for the spot chase, seeing that happen It’s incredible what’s happening. The spot price is holding steady in the mid-$30s; it’s been around $25 since we started talking about it. We’re already seeing interest on the upside as volume is higher and calls are Bias has also improved. Seeing these strikes unfold, peak gamma was around $32,000 when we discussed this in early October and is now around $36,000 to $40,000.”
From a technical analysis perspective, traders are watching for the formation of a bull pennant pattern on the daily chart and the formation of a golden cross.
In the short term, the catalytic move to watch is whether a price break above the $36,300 level will lead to escalating short pressure, and whether this will trigger a rapid increase in spot buying volume among options and perpetual futures traders who will be forced to liquidate their positions or face liquidation.
Essentially, as spot volume peaks, one sees a surge in total short liquidations, a process illustrated in the chart below.
Alex Thorn, director of research at Galaxy, said, “If BTC/USD rises to $35,750 to $36,000, last week’s Bitcoin gamma squeeze could happen again.”
prick explained That:
“Options traders would need to buy $20 million in spot BTC for every 1% increase, which could lead to explosive consequences if we start heading towards these levels.”
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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