Why a trader says Bitcoin is short-term bearish despite holding $30K

Why a trader says Bitcoin is short-term bearish despite holding $30K

A pseudonymous trader known as “Byzantine General” is short-term bearish as Bitcoin (BTC) continues to test the same $30,000 support area.

Although the price of Bitcoin is staying above a key support level, the trader said the price action is not bullish. He wrote:

“In the midst of all this chaos, here’s a bitcoin chart. Not much to do. It’s bearish no matter how you look at it. But we’re sitting on support, so no swing short opportunity either… It’s just waiting now. > YO needs to hold.”

“Options market is signaling a short-term bearish view”

Analysts see a similar trend from the options market and previous Bitcoin fractals. Fractals are technical candle chart patterns that analysts typically use to compare the current price action of Bitcoin to previous cycles.

According to analysts at the data analytics company Laevitas, the options market signals are short-term bearish view. They said:

“As Bitcoin consolidation continues, put/call ratio on @DeribitExchange is at 2 today. In last 24h, seeing decent buy volume on 26MAR 9000p, 13000p and 14000p. Options market is signaling a short-term bearish view.”
Why a trader says Bitcoin is short-term bearish despite holding $30K
Bitcoin options traded instruments. Source: Laevitas

The options market has a larger impact on the price trend of Bitcoin now than before because the open interest is now hovering above $3 billion.

There are significantly more active options contracts and options traders compared to before. This means that if there is selling pressure coming from the options market, it would likely have a negative impact on the price of Bitcoin.

Based on the fractal that analysts at “Material Scientist” found, both historical price cycles and the options market data hint at a short-term consolidation phase. The analysts noted:

“Next fractal for #BTC – 10-day prediction: Low 30ks retest and then send it!”
Why a trader says Bitcoin is short-term bearish despite holding $30K
BTC/USDT fractal. Source: Material Indicators

Consider the high miner position index

One of the possible reasons why the price of Bitcoin continues to range and stagnate could be the high selling pressure coming from miners.

Data from CryptoQuant shows that the Miners’ Position Index is relatively high, which means miners are depositing Bitcoin to exchanges.

Since miners are one of the few external and unmatched sources of selling pressure in the Bitcoin market, a high Miners’ Position Index usually precedes a sell-off.

Why a trader says Bitcoin is short-term bearish despite holding $30K
Bitcoin Miners’ Position Index. Source: CryptoQuant

On Jan. 26, CryptoQuant CEO Ki Young Ju said:

“BTC Miners’ Position Index hit the 8-year high. They’ve been moving an unusual amount of Bitcoins lately. It seems they’re continuously realizing profits since 42k. This is one of the reasons why I keep my bearish bias.”

As long as the options market is leaning towards a bearish short-term trend and miners continue to sell BTC, the price of Bitcoin is unlikely to break out in the near term.

However, the $34,000 resistance level remains the key area in the foreseeable future. If Bitcoin surges above it, there is a chance for a quick trend reversal to the upside.

Title: Why a trader says Bitcoin is short-term bearish despite holding $30K
Sourced From: cointelegraph.com/news/why-a-trader-says-bitcoin-is-short-term-bearish-despite-holding-30k
Published Date: Thu, 28 Jan 2021 11:01:32 +0000

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Jeannine Cruz

Jeannine Cruz– Earnings I am known as Jeannine Cruz, I am a writer and an industrialist by profession. My age is 32 years. My aim is to gather the attention of the targeted audience without being boring and unexciting. I like to utilize the free time in writing my views and thoughts for my book lovers or readers. My most preferred articles are usually about finance and business; however, I have written various topics in my articles. I do not have a specific genre. I get very creative when I have to express myself, I often sing, write or draw to portray my feelings. When it comes to my free time or you can say ‘ME-TIME’, I love to play with my cat, sleep an extra hour, or play my favorite video games.

Leave a Reply

Your email address will not be published. Required fields are marked *

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together