Can Bitcoin price move up above this important MA line?

Bitcoin pullback from $ 7,000 to $ 6,700 has had a negative impact on the derivatives market. The Put / Call ratio on Bitcoin options contracts reached a 3-week high of 1.53 on April 5, an increase of more than 139% in just 3 days.

According to the Deribit Insight, the large Put accumulation rate in the past few weeks is likely to be the "long guard BTC":

“The optional contract on 3 April expires which increases 1000 ATM calls. Yesterday, when the price was low at 7.1k, more than 500 BTC were purchased via ATM call (April 24 7k-8k) + put through put (17 + 24/4 6.5-7k). Using put BTC to protect long BTC or using BTC long calls to stimulate gains, both show how to use long options contracts to achieve upside with the most limited downside in an uncertain time. ” .

While the Put / Call ratio on the BTC option contract continues to be higher than 1, signaling a price drop, the latest chart shows that traders are ready to reverse prices when the data quickly drops. This movement coincides with the spot price of Bitcoin strengthening foothold above $ 7,000. According to the latest chart of cryptocurrency analysis firm Skew, the Put / Call ratio is 1.06 at the time of writing.

Put / Call BTC Rate | Source: Skew


ATM volatility term structure of Bitcoin | Source: Skew

The basic market sentiment for the week has been largely positive, with no major downside happening. In addition, the structure of the term fluctuations at-the-money (ATM - breakeven) for option contracts until September 2020 is increasing. It is likely that traders anticipate periods of high volatility before halving occurs.

However, the volatile term structure structure of the ATM records the decline of the December option contract. This basically implies that traders are expecting Bitcoin prices to become less volatile after that. The movement of Implied Volatility (IV) and Real Volatility (RV) is also consistent with this sentiment as the measure between the two indices has expanded gradually since the 3rd week of March.

The levels Bitcoin daily

The price of BTC has increased significantly since reaching a low on March 13, creating at least 4 higher lows. This is a sign that the price is in an uptrend.

Observing the daily chart, BTC created a bullish engulfing candle on April 6 and moved above the key resistance at $ 6,850. The rally continues after that and the price also moves above the annual open level.

However, the up move has stopped after reaching the 50-day MA, which has yet to turn into support. If successful, the next resistance level is found at $ 7,750.


Bitcoin chart | Source: Trading View

Short-term view

In the short term, the price is following the ascending support line from March 30. But BTC also seems to create a short-term symmetrical triangle, which is considered a neutral pattern. Since this happens when prices are in an uptrend, it is possible to breakout from the pattern.

Even on a breakdown, it is very likely that the price will find support at $ 7,100, significantly consolidating the support level and the ascending support line. Therefore, a breakdown from the short-term triangle does not necessarily mean that the uptrend has ended.


Bitcoin chart | Source: Trading View

The breakout is also expected to bring prices to the resistance line of the ascending wedge that has been trading since bottoming on March 13.

If so, the price will complete the fifth and final wave of the Elliott pattern, then breakdown.


Bitcoin chart | Source: Trading View

A strong move above $ 7,800 will invalidate the wedge pattern and indicate that the price has not really moved up. At the time of writing, this does not seem likely.

In short, BTC is trading inside the short-term symmetrical triangle and the long-term ascending wedge. A breakout from the triangle will probably move the price to the resistance line of the wedge.

You can see the price of BTC here.

Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Thuy Trang

According to AZCoin News

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