Bitcoin’s $90K Ceiling Under Pressure from Options Expiry and Selling Sentiment
Bitcoin (BTC) is currently holding steady above $87,000, mostly unchanged in the past 24 hours, as investors brace for a record-breaking $16.5 billion monthly options expiry on Friday, March 28th. BTC/USD continues to face significant headwinds in its attempt to breach the $90,000 resistance level, with technical indicators and market sentiment suggesting a potentially volatile period ahead.
Massive BTC Options Expiry Could Trigger Price Swings, Bears Eye $84,000
The approaching options expiration marks a significant event that can cause great volatility in the Bitcoin market. With a $16.5 billion total open interest, the expiry could cause prices to move in either direction depending on where Bitcoin settles on Friday. With $10.5 billion against $6 billion, call (buy) options now surpass put (sell) options.
Still, a good number of these calls are at a strike price of $92,000 or more, which calls for a 6.4% price rise from present levels to turn lucrative. This lessens the instant benefit of bullish projections.
According to market dynamics, bears have an incentive to drive Bitcoin’s price below $84,000 before the expiry, so greatly increasing the value of put options and maybe causing more downward pressure.
Bitcoin’s Rally Stalls Below $90,000 Amidst Short-Term Holder Selling Pressure
Bitcoin has battled to keep momentum and break through the pivotal $90,000 resistance even reaching a weekly high of $88,252. According to Glassnode’s analysis, a major determinant is continuous sell-side pressure from short-term holders (STHs), investors keeping Bitcoin for fewer than 155 days.
Now experiencing large losses, this cohort—which accumulated Bitcoin at higher price levels—is fueling the continuous selling pressure. The biggest observed volume of STH supply now kept at a loss points to the degree of this strain since July 2018.
Decreasing Liquidity and Lack of New Demand Further Hamper Bitcoin’s Ascent
Complicating matters further, Bitcoin’s market liquidity has been shrinking. From their peak during the rise to all-time highs, onchain transfer volumes have plummeted by a significant 47%; likewise, the count of active addresses has dropped. Moreover, the declining open interest in the BTC futures market points to less trade activity.
With the cost basis distribution suggesting a concentration of supply at higher price levels but no major influx of buyers at lower levels to drive a recovery, Glassnode data also points to a lack of notable new demand entering the market.
BTC/USD Technical Analysis: Key Resistance Zone and Support Levels
Technically, Bitcoin’s immediate resistance falls in the $88,700 to $92,000 range, where the 50-day and 100-day Simple Moving Averages (SMAs) now find home. Confirming the conclusion of the present downturn and opening the path for a possible climb towards $100,000 depend on overcoming this barrier.
On the negative side, important support levels to monitor include the 200-day SMA around $85,500 and the main support at over $82,700. A break below these levels could cause more falls towards the current low points close to $81,138 and $76,600. Popular analyst Decode has determined that an important mark to keep an eye on is the 20-weekly exponential moving average (EMA) at $88,600.
Bitcoin Price Prediction: Analysts Eye Short-Term Upside Potential, But Macroeconomic Concerns Linger
Some experts see possibility for a brief upswing despite the present hurdles. Based on a positive pennant formation on the 4-hour BTC/USD chart, Trader Titan of Crypto suggests a possible ascent towards $91,000 should a breakout take place. Still weighing on risk assets, meanwhile, more general macroeconomic issues such the continuous global trade war and US government spending cuts could restrict Bitcoin’s future growth. This cautious attitude is highlighted by Bitcoin’s recent underperformance relative to gold, which is breaking new all-time highs.
Currently in a delicate state, Bitcoin is valued at $87,000 as it approaches a significant option expiry. Macroeconomic uncertainty, declining liquidity, and selling pressure from short-term holders all contribute to the great opposition the bitcoin encounters below the $90,000 barrier.
Although the approaching options expiry could bring more volatility, the short-term direction of Bitcoin will depend much on bulls’ capacity to cross the main resistance zone between $88,700 and $92,000. For better indications of future market direction, investors should attentively track price behavior around these levels and the result of Friday’s options expiry.
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