Bitcoin price decline channel and loss of kinetic energy may make 60,000 US dollars a resistance


Bitcoin (Bitcoin) There seems to be a lack of power to retest the all-time high of $67,000 set on October 20, which has led investors to question whether the bullish moment has faded. Even if prices face these obstacles, it is too early to call the $58,000 support level test the beginning of a descending channel.

Coinbase’s Bitcoin price (in U.S. dollars). Source: TradingView

One of the factors limiting the gains is the regulatory uncertainty in the United States. Annie is overBracewell LLP’s government enforcement and investigative business partner and the former chief barrister of the Commodity Futures Trading Commission (CFTC) said the agency “has no simple answer” to provide clear rules.

On the other hand, increasing adoption forces traditional banks to seek cryptocurrency products.For example, a large Russian private bank TinkovThe owner of a large online brokerage service is studying crypto-related investment services, even though the Bank of Russia refuses to launch such services.

The Coinbase exchange topped the list this week because Most downloaded apps For the US Apple Store, this is exciting. Coinbase defeated technology giants such as TikTok, YouTube and Instagram, which is not a trivial matter. Coinbase was first listed on the app store in 2014 and became the most popular download in the United States in 2017 and May 2021.

Professional traders stumbled but bullish again

To determine how bullish or bearish a professional trader is, one should monitor the futures premium-also known as the “basis”.

This indicator measures the difference between long-term futures contracts and current prices on spot market exchanges. The health market expects an annualized premium of 5% to 15%, also known as the futures premium.

This price gap is caused by participants requesting more funds to extend the settlement time. Whenever the indicator disappears or becomes negative, a red alert will appear, which is called a “rollback”.

Bitcoin 3-month futures benchmark interest rate. Source: Laevitas.ch

Note how the sharp drop caused by the resistance test of $58,000 on October 27 caused the annualized futures premium to reach its lowest level in three weeks. Nevertheless, the indicator has recovered well to the current 17%, indicating a moderately bullish outlook.

To confirm whether this change is specific to the instrument, the option market should also be analyzed.

The 25% delta skew compares similar call (buy) and put (sell) options, and when “fear” prevails, it turns positive. This situation reflects that the cost of protective put options is higher than that of similar risky call options.

When the market maker is bullish, the opposite movement is established, causing the 25% delta skew indicator to shift to the negative zone. Readings between minus 8% and plus 8% are generally considered neutral.

Deribit Bitcoin options 25% delta skew. Source: laevitas.ch

Since September 30, 25% of the delta skew has been hovering in the neutral zone. The latest bottom on October 25 was minus 6%, which is not enough to be considered moderately bullish. However, even the 12.5% ​​correction of Bitcoin from $66,600 on October 21 to $58,200 on October 28 is not enough to bring fear to professional traders.

Although there are no bearish signs in the Bitcoin derivatives market, the bulls should be concerned about the potential downward channel that began on October 19. If this trend is further confirmed, traders should expect $60,000 to become resistance on November 12.

There is currently no sign of pressure from professional traders, so it shouldn’t be a problem to make corrections after a 63% rise in three weeks leading to an all-time high of $67,000 on October 20.

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