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Investors remain bullish despite Bitcoin’s repeated failure to test the $30,000 level in recent weeks, according to options market data presented by crypto analytics firm The Block. .
Bitcoin has been trading above the $28,000 level at $1,500 for the past three weeks, with the bulls dying after an incredible year-to-date rally.
Year-to-date, Bitcoin is up nearly 70%.
The options market also suggests that the upside continues for investors.
Delta skew of 25% of Bitcoin options expiring in 7, 30, 60, 90 and 180 days were all in the 2-5 region as of Tuesday, with little change over the past 3 weeks was. Bitcoin price.
Delta option skew of 25% is representative of the extent to which the trading desk is over- or under-billed for upside or downside protection via the put and call options it sells to investors. widely monitored as a good indicator. A put option gives the investor the right, but not the obligation, to sell the asset at a specified price, while a call option gives the investor the right, but not the obligation, to buy the asset at a specified price.
A delta option skew of 25% above 0 suggests that the desk is charging more for puts over comparable call options. This means there is more demand for calls than for puts. This can be interpreted as a bullish sign as investors are keen to ensure protection against price increases.
Importantly for long-term Bitcoin bulls, the 180-day skew (lasting 5.4) remains close to its highest level since late 2021, making the market increasingly bullish on Bitcoin’s long-term outlook. It reflects that it continues to be
Bitcoin Price – Where to Go Next?
Technicals and upcoming macro risk events could determine Bitcoin’s next stop above $30,000 or pull back towards the $25,500 support.
The consolidation of the past few weeks means that BTC price is currently under pressure within the pennant’s technical structure.
These structures often form before large-scale breakouts that can go in either direction.
An upward breakout is likely to cast doubt on the imminent $30,000 test, and a downward breakout could open the door to a retest of the support in the $25,500 area.
Meanwhile, while Bitcoin continues to find support above the 21DMA this week, its price is showing a bearish divergence from the 14-day Relative Strength Index (RSI), adding to the mixed short-term technical situation. increase.
Data out of the US this week have finally started to show the belated effects of aggressive Fed tightening over the past 12 months, greatly influencing the idea that a US recession is likely to occur later this year, with the Fed will pivot to a cutting cycle soon ahead.
But Friday’s US jobs data could make or break this narrative.If the data is stronger than expected, Bitcoin could fall and vice versa.
Bitcoin bulls likely to buy short-term declines aggressively
However, amidst a cocktail of positive long-term technicals, on-chain developments, and macro-fundamentals, Bitcoin bulls are likely to buy aggressively, heading for a short-term decline that Bitcoin’s price may endure. expensive.
Positive long-term technical start – Bitcoin’s strong rebound below $20,000 from its recent 200DMA (and realized price) and the ‘golden cross’ seen in early February is a very bullish long-term technical for the cryptocurrency. It’s a sign.
Elsewhere, various metrics related to network activity and various on-chain metrics with a long-term focus, such as those summarized in Glassnode’s “Recovering from Bitcoin Bear” dashboard, are all new. It’s a flashing signal that the bull market is here.
On the other hand, it seems very likely that 1) U.S. growth will weaken and 2) crypto will continue to benefit from the macro environment this year. bank trouble keep bubbling meaning 3) federal reserve system We are forced into a relentless rate cut cycle. This means that financial conditions have eased, liquidity has improved, and it is a great environment for cryptocurrencies.
Of course, the above assumptions about how things will be on the macro front are not certain.
Perhaps inflation is too high for the Fed to start cutting rates this year.
Not only does it risk worsening the US recession, but it also risks reigniting the banking crisis, which could still support Bitcoin as a safe haven.
Arguably the worst outcome for cryptocurrencies from a macro perspective would be for US economic growth to pick up (i.e. no recession), inflation to remain high, and the Fed to cut interest rates to the mid-5.0% range. (rather than the current market expectation of a reduction towards 4.0% by the end of this year).
However, recent economic data makes this scenario less and less likely, meaning macros are likely to continue to favor cryptocurrencies in the medium to long term.
An analysis of Bitcoin’s long-term market cycle also suggests that a new Bitcoin bull market is here.
According to the Bitcoin Stock-to-Flow pricing model, the Bitcoin market cycle is approximately 4 years and gives an estimated price level based on the number of BTC available in the market versus the amount mined each year.
Bitcoin’s current fair value is around $55,000 and could exceed $500,000 in the next post-halving market cycle. This is about 18 times more profit than the current level.
Finally, Blockchaincenter.net’s popular Bitcoin rainbow chart shows that Bitcoin is at BUY! at the current levels. We have recently recovered from the “basically fire sale” zone of late 2022. In other words, the model suggests that Bitcoin is gradually recovering from a very oversold state. During the last bull market, Bitcoin was able to reach a ‘sell’. Seriously, sell! zone.