Bitcoin closes above $ 60,000 for the month, but a bearish channel and loss of momentum could turn it into resistance
Bitcoin On October 31, the $ 60,000 support was tested multiple times, closing the month over $ 61,000.
TradingView’s data showed a lackluster price movement yesterday, with BTC / USD closing the month at around $ 61,300 but still well below the worst-case scenario from late October.
Source: TradingView
PlanB, the father of the stock-to-flow (S2F) model, correctly predicted the last $ 47,000 and $ 43,000 for August and September, respectively.
But even without success, the end of October over $ 60,000 means a success for itself, as this is the third week in a row that BTC closes above this level and also the first month close over $ 60,000 ever.
As Cointelegraph noted, Bitcoin is tending to underperform Bitcoin this month, with Mondays in stark contrast to the demonstration of strength – especially at a time when the US is opening to trading.
However, Bitcoin does not appear to have the strength to retest the all-time high (ATH) of $ 67,000 it hit on October 20th, and this leads investors to wonder whether or not the upward momentum has stopped. Even given these hurdles, it’s too early to call a test of $ 58,000 support the beginning of a descending channel.
Bitcoin price chart | Source: TradingView
One of the factors limiting the rally is regulatory uncertainty in the US. Anne T Regi, partner in law enforcement and investigation at Bracewell LLP and former chief attorney for the Commodity Futures Trading Commission (CFTC), says it won’t be easy for the authorities to establish clear rules.
On the other hand, increasing adoption has put pressure on traditional banks to look for crypto products. For example, the large Russian private bank Tinkoff, the owner of a large online brokerage service, is working on crypto-related investment services despite the fact that the Russian central bank has kept the tranches intact.
Furthermore, sentiment is not positive as the Crypto Fear and Greed Index shows that “greed” has been decreasing in the past few days.
Crypto Fear and Greed Index as of October 31 | Source: alternative.me
Professional traders stumble, but rise again
To determine how bullish or bearish the price is for professional traders, people should keep an eye on the futures contract premium – also known as the “base rate”.
This indicator measures the difference between longer-term futures contracts and the current stock exchange prices on the spot market. In healthy markets, also called contango (deferred purchase), an annual premium of 5 to 15% is expected.
This price difference is due to the fact that participants are charging more money in order to withhold payments longer, and a red alert appears when the indicator fades or turns negative, known as backwardation.
Bitcoin base rate for 3 months | Source: Laevitas.ch
Notice how the sharp drop caused by a test of the $ 58,000 resistance on October 27th drove the annual Bitcoin futures premium to three-week lows. However, the indicator has recovered well to the current level of 17%, which signals a moderate upward trend.
To confirm whether this move is specific to this instrument, one should also analyze the options markets.
The 25% delta deviation compares similar call and put options and becomes positive when “fear” prevails. This situation reflects put options that are valued higher than calls with similar risk.
The opposite trend was maintained as the market makers rebounded, causing the 25% delta deviation indicator to turn negative. Results of minus 8% to plus 8% are generally considered neutral.
Allocation of Bitcoin Options 25% Delta | Source: Laevitas.ch
The delta deviation of 25% has been in the neutral zone since September 30th. The last low on October 25th was minus 6%, which is not enough to be considered a moderate uptrend. But even Bitcoin’s 12.5% correction from $ 66,600 on October 21st to $ 58,200 on October 28th was not enough to scare professional traders.
While there are no signs of bearish signs in the Bitcoin derivatives market, the bulls should be concerned about a possible descending channel starting October 19.
There is currently no sign of stress from professional traders, so a correction should not be a problem after a 63% rally in three weeks that hit an all-time high of $ 67,000 on October 20th.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Mr. Teacher
According to AZCoin News
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Bitcoin closes above $ 60,000 for the month, but a bearish channel and loss of momentum could turn it into resistance
Bitcoin On October 31, the $ 60,000 support was tested multiple times, closing the month over $ 61,000.
TradingView’s data showed a lackluster price movement yesterday, with BTC / USD closing the month at around $ 61,300 but still well below the worst-case scenario from late October.
Source: TradingView
PlanB, the father of the stock-to-flow (S2F) model, correctly predicted the last $ 47,000 and $ 43,000 for August and September, respectively.
But even without success, the end of October over $ 60,000 means a success for itself, as this is the third week in a row that BTC closes above this level and also the first month close over $ 60,000 ever.
As Cointelegraph noted, Bitcoin is tending to underperform Bitcoin this month, with Mondays in stark contrast to the demonstration of strength – especially at a time when the US is opening to trading.
However, Bitcoin does not appear to have the strength to retest the all-time high (ATH) of $ 67,000 it hit on October 20th, and this leads investors to wonder whether or not the upward momentum has stopped. Even given these hurdles, it’s too early to call a test of $ 58,000 support the beginning of a descending channel.
Bitcoin price chart | Source: TradingView
One of the factors limiting the rally is regulatory uncertainty in the US. Anne T Regi, partner in law enforcement and investigation at Bracewell LLP and former chief attorney for the Commodity Futures Trading Commission (CFTC), says it won’t be easy for the authorities to establish clear rules.
On the other hand, increasing adoption has put pressure on traditional banks to look for crypto products. For example, the large Russian private bank Tinkoff, the owner of a large online brokerage service, is working on crypto-related investment services despite the fact that the Russian central bank has kept the tranches intact.
Furthermore, sentiment is not positive as the Crypto Fear and Greed Index shows that “greed” has been decreasing in the past few days.
Crypto Fear and Greed Index as of October 31 | Source: alternative.me
Professional traders stumble, but rise again
To determine how bullish or bearish the price is for professional traders, people should keep an eye on the futures contract premium – also known as the “base rate”.
This indicator measures the difference between longer-term futures contracts and the current stock exchange prices on the spot market. In healthy markets, also called contango (deferred purchase), an annual premium of 5 to 15% is expected.
This price difference is due to the fact that participants are charging more money in order to withhold payments longer, and a red alert appears when the indicator fades or turns negative, known as backwardation.
Bitcoin base rate for 3 months | Source: Laevitas.ch
Notice how the sharp drop caused by a test of the $ 58,000 resistance on October 27th drove the annual Bitcoin futures premium to three-week lows. However, the indicator has recovered well to the current level of 17%, which signals a moderate upward trend.
To confirm whether this move is specific to this instrument, one should also analyze the options markets.
The 25% delta deviation compares similar call and put options and becomes positive when “fear” prevails. This situation reflects put options that are valued higher than calls with similar risk.
The opposite trend was maintained as the market makers rebounded, causing the 25% delta deviation indicator to turn negative. Results of minus 8% to plus 8% are generally considered neutral.
Allocation of Bitcoin Options 25% Delta | Source: Laevitas.ch
The delta deviation of 25% has been in the neutral zone since September 30th. The last low on October 25th was minus 6%, which is not enough to be considered a moderate uptrend. But even Bitcoin’s 12.5% correction from $ 66,600 on October 21st to $ 58,200 on October 28th was not enough to scare professional traders.
While there are no signs of bearish signs in the Bitcoin derivatives market, the bulls should be concerned about a possible descending channel starting October 19.
There is currently no sign of stress from professional traders, so a correction should not be a problem after a 63% rally in three weeks that hit an all-time high of $ 67,000 on October 20th.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Mr. Teacher
According to AZCoin News
Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page
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