107 Interactions, 6 Today
When an asset attempts to break through a consolidation range established 2-3 months ago, it usually takes more than one bullish surge. Over the last few weeks, Bitcoin has spent more time between $30,000 and $40,000 than between $40,000 and $64,000. And, while the asset has repeatedly bounced off the $30k mark, breaking $40k is what counts for its bullish continuity.
While many anticipated smooth sailing above $40,000 once Bitcoin retested the range on July 26, the crypto’s current price action suggests otherwise.
A closer look at Bitcoin’s 1-hour chart
As can be seen, BTC tested $40,000 first on July 26th, followed by a timely correction to $36.5K. However, in order for the asset’s market momentum to continue in a bullish direction, it needed to break the $40,000 barrier during its second re-test. The price rebounded once more, and on July 29th, it was tested once more.
BTC has now dropped below a support range (highlighted in the chart) that it had held for 57 hours over the last few hours. The expected trend would have been upward, but it appears to be reversing in the short term. At the time of publication, the EMA-20 was trading just above $38,500, and the correlation between the EMA-20 and SMA-20 was also bearish.
What triggered a decline?
According to Skew’s data, the massive Options expiry that will take place over the next few hours may have played a role. According to the same, 47.3k Bitcoins are set to expire on July 30th.
Furthermore, as the chart shows, puts and calls contracts have been nearly even, with puts contracts slightly outperforming calls.
However, a closer examination reveals that a greater number of calls are currently being placed at a strike price of $40,000. This suggests a bullish strategy. With the price of cryptocurrency falling, the current situation can be described as market disruption.
How does disruption affect BTC’s short-term price?
Right now, the long-term trend is still bearish, and Bitcoin is attempting to recover from it. The asset’s short-term bullish trajectory is also bucking, with Bitcoin dropping below $40,000. If BTC closes the day below $40,000, the majority of the expiry will be subject to a bearish squeeze. When there is a conflict between the short-term and long-term scenarios, the price usually follows the market’s long-term trend.
Right now, Bitcoin is being led by the ongoing market disruption. If the bulls are unable to break through, Bitcoin may re-test the $36,500 price range.