According to analysts, Bitcoin’s strong rejection of around $44,000 is more evidence that derivatives markets play a key influence in the asset’s price fluctuations. Bitcoin (BTC) dropped more than 2% from local highs on Jan. 13 in the latest move to leave market investors guessing about what’s next for the world’s most valuable digital currency.
Following the pair’s greatest levels in more than a week, data followed the reversal in BTC/USD. Following a jump to $44,450 on Bitstamp following the Wall Street open, an hourly candle prompted losses of $1,500. Bulls were disappointed following repeated expectations for a relatively simple squeeze into $46,000. This indicated that rangebound action remains the rule of the day for Bitcoin.
“There was still no apparent sense of direction,” says prominent trader and analyst Scott Melker. He informed Twitter followers on the day, “Still just chopping sideways,” adding that Bitcoin had hit lows earlier in the week with its sub-$40,000 plunge, which was also by his own expectations. Daan Crypto Trades, another Twitter account, also mentioned $45,700 as an essential upward objective for a resistance/support flip. “The $45.7K level is on my radar as the next region of interest.” “Flipping that level for the bulls will be critical,” he added. Others were more optimistic about a paradigm change occurring shortly.
Outlook on Crypto Market
“BTC may unveil a new market structure in the coming days and weeks, in which case it would be well worth paying close attention to it,” trader and analyst Rekt Capital predicts. Options traders are being scrutinized. According to a new study, the reason why $40,000 was a short-lived slump and $44,000. On the other hand, it established a stronghold later is because of this. According to crypto trading company QCP Capital, the decisive element in options markets has become substantial enough to have a “major influence” on BTC price behavior.
The positive impact on the market when they take profit on those option positions is also pretty evident.” “In addition, at the $44,000 spot level, a savvy options trader who had acquired 42,000 January calls began collecting profit on them, naturally providing some resistance.”
According to statistics from Coinglass, open interest in options is still well below all-time highs from 2021.
