Bitcoin’s bull run may not be over yet – here are 3 reasons why
The bullish momentum that has pushed the price of Bitcoin (BTC) to a one-year high continues into a third week as it pushes towards the $35,000 handle.
Some notable developments that support the current bully movement are:
Formation of a golden cross between the 50-day moving average and the 200-day moving average. Liquidity charts from DecenTrader and Kingfisher highlight the potential for a short-term squeeze in the $36,300–$40,000 range if Bitcoin price can flash $36,300. Options market highlighting a change in investor sentiment and position. Information.
Still a decent amount of money for #bitcoin at current prices of up to $39,500.
Follow him here: pic.twitter.com/2i09F7Z9We
— Decentrader (@decentrader) October 26, 2023
Bitcoin options data seems to be in line with the view that further price increases may be in store and suggests that last week's gamma event could be extended as the price of BTC rose to $35,280. The data shows the probability of a gamma event occurring in the $35,000–$40,000 range, and investor positions are adjusted accordingly.
Daily option volumes increased in the stock market last week, according to Big Picture podcast host Joe Cruy:
“Paradigm had its best day ever with 70% volume.”
Kelly Greer, head of US sales at Galaxy, added to the discussion on the Bitcoin options market.
“The flows we've seen reflect everything described here and what's in the market at the listed location. A higher month in Q3 to Q4, demand for the calls we've been highlighting. We started highlighting this short gamma, the significant difference between Bitcoin and ETH in early October, actually, that's the first time we started talking about this. Once we saw that game get out of range and chase and see the position sit in the mid-thirties, it was amazing to see him in the middle from the moment we started talking about it. – twenty five. We now see interest in vol being higher and call skews being slightly higher. […] Seeing those attacks come out. So at the beginning of October, the highest gamma we were talking about was around $32K, but now it's between $36K and $40K.
Related: CME Becomes Second Largest Bitcoin Futures Exchange As Open Interest Increases
From a technical analysis point of view, traders are eyeing the bullish pennant pattern formed on the daily time frame along with the birth of a golden cross.
In the short term, whether or not a price move to the $36,300 level will lead to pressure for shorts, and whether this will trigger a rapid increase in position buying by futures traders as an option and continuation. They are forced to cover their positions or facial fluid.
Essentially, one sees a peak in position size as compound short flows increase, a process documented in the chart below.
Alex Thorne, head of firm-wide research at Galaxy, said: “Last week's Bitcoin gamma squeeze could happen again if BTC/USD moves higher to $35,750 – $36,000.”
Thorn explained:
“Options traders have to buy $20 million in spot BTC for every 1% upside move, which could be explosive if we start going to those levels.”
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
