Bitcoin (BTC), which fell more than 22% from its local highs on Jan. 13, was the latest move to keep market participants guessing as to what the future holds for the most valuable digital asset.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
“One step at the time”
Cointelegraph Markets Pro and TradingView data tracked the pullback of BTC/USD following the pair’s highest levels in over a week.
After the Wall Street Open, Bitstamp’s $44,450 was reached. An hourly candle followed that caused losses of $1,000.
Bulls disappointed after several calls for a relatively easy squeeze towards $46,000, a sign that Bitcoin’s rangebound activity is still the norm.
Scott Melker, a popular analyst and trader, said that “there was still no clear indication of direction.”
He said that he was still “just chopping sideways” to his Twitter followers. He also noted that Bitcoin had fallen to its lowest point with a sub-$40,000 plunge earlier in the week. This was in line with his predictions.
Daan Crypto Trades, a Twitter friend, also highlighted $45,700 in the upside target as important for a support/resistance flip.
“The $45.7K area is my next area of interest. He wrote that it would be crucial to flip this level for bulls.
“BTC is looking great on LTF, but still has much work to do on HTF before we can call this a true reversal.” “One step at a.
Others expressed more optimism about a paradigm shift in the near-term.
Analyst Rekt Capital predicted that BTC could reveal a new market structure over the next few days and weeks.
Related: A Bitcoin run to $44K could be a relief bounce according to traders, citing a repeat December’s “nuke”
Options traders are in the spotlight
Research also suggests that the $40,000 dip was temporary and that $44,000 became an area of resistance.
QCP Capital, a crypto trading company, believes that options markets are the key determinant of BTC price movement.
Telegram updates explained that “For example, one reason why Ether and BTC have not been followed up on below $40,000 and $3,000 is possibly due to the small number of large players having strikes at those levels.” They naturally attract support when they bid for delta trading spots. The market benefits from their profit are clear when they also take advantage of those option positions.
“Additionally, a sharp option player who had purchased 42,000 January call options started making profit at the $44,000 spot level. Naturally, this created some resistance.”
Data from Coinglass shows that options open interest is still far below 2021’s record highs.
Chart showing open interest in Bitcoin options Source: Coinglass