As a seasoned crypto investor with battle scars from more than a few market cycles, I find myself cautiously optimistic about the current state of Bitcoin. The expiration of options contracts can be a thorn in our side, but I’ve learned to take it in stride – much like a farmer waits for the storm to pass before tending to his crops.
For numerous cryptocurrency investors, Bitcoin‘s price remaining stable can be frustrating and cause anxiety about potential downward trends. Yet, it’s essential to remember that a decline might equally occur as an increase. However, a bullish trend is gradually forming, suggesting a more probable upward breakthrough instead.
Here we go again with Friday, and the anticipation surrounding Bitcoin options expiration looms large. Historically, this occasion has had a sobering effect on Bitcoin as many long positions, particularly those held by optimistic traders, have been forced to close.
Today marks the expiration of approximately $1.1 billion worth of Bitcoin options contracts. The price level that could trigger significant liquidations for both long and short traders is roughly $60,000, so it wouldn’t be unexpected if Bitcoin revisits this price point.
A very bullish pattern
Despite the recent price movements of Bitcoin since early August, the 4-hour chart shows a highly optimistic setup for its price. The price swings have largely been confined within what has formed into an ascending triangle. This is generally a very positive pattern, as it tends to break out in an upward direction.
The graph demonstrates an ascending sequence of lower highs, with the price remaining relatively stable near the peak of the triangle. The price is progressively being compressed towards the tip of the triangle, suggesting a potential breakout could occur soon. This prediction is based on the observation that Bitcoin usually does not extend to the full length of these patterns.
As I analyze the current sideways movement in the market using Fibonacci levels, it’s striking how they align almost perfectly with the price action within the triangle formation. Notably, the price has recently bounced back from the 0.618 level, which coincidentally corresponds to $60,000 – a significant level as it represents the max pain point for the upcoming Bitcoin options expiry. A potential retest of this level could even align with a touch of the triangle’s bottom trend line.
Each increase in price seemed to encounter resistance at two points: the upper trend line and the 0.786 Fibonacci level approximately at $61,400, indicating a struggle at these specific price points.
If the breakout does occur and confirms by moving above the current level, a potential measured move might push the price of Bitcoin back towards its record high of $73,800.
Higher time frame also very bullish
Looking at the broader weekly perspective, it’s worth mentioning that the Bitcoin price is attempting to surpass $61,000. If it manages to maintain this level by the end of the week, this would be a positive sign for the market. Additionally, it’s crucial to consider the stochastic RSI on the chart. A potential crossing here before the week ends might indicate that Bitcoin has the momentum required to reach its record high again.
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2024-08-23 12:07