Options market analysis

A rally took place after Bitcoin fell to 42,000 on December 4th. However, it failed to break the strong resistance at 52,000 and is currently trading at $ 47,000. The short-term implied volatility peaked at 94 and is currently 66.

Source: Laevitas.ch

Calls with a strike of $ 50,000 had the highest open position on the expiry date of January 7th. A lot of calls have been sold in the last few days. It appears that low demand in the spot market has deterred options traders from being optimistic about a surge above $ 54,000 when the first maturity date hits in January.

Source: Laevitas.ch

Technical analysis

In the daily timeframe, Bitcoin retests the resistance line it broke previously (yellow line), both price and RSI. But we still can’t say the correction is over. Bitcoin has to make a higher high and break above the blue trend line in the price chart and RSI. The resistance level in the RSI is the intersection of the SM100 and the 50 baseline and a breakout would show that the bulls are in control.

BTC / USD daily chart | Source: TradingView

In the lower time frame, the price mostly fluctuates within the rectangle (yellow box). For the short term, the downtrend lines on the RSI and MA21 are worth watching as when they broke out on December 21st, it was followed by an 11% rally.

BTC / USD 4-hour chart | Source: TradingView

On-chain analysis

Despite the neutral to negative sentiment in the futures market, the medium- and long-term indicators of the on-chain data remain positive. Along with hashrate recovery, the average weekly number of active users increases. This trend confirms that demand remains in the market and any catalyst could trigger another rally.

Source: Glassnode

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