Monday, January 17

Bitcoin Price Analysis: Volatility Expected Amid Dec-31 BTC Options Expiration


Amid the last days of 2021, Bitcoin is struggling around the $50K price area. The primary cryptocurrency is facing a huge options expiration event on the last day of 2021; hence, the next days are expected to be volatile.

Option Market Analysis

This Friday, 31st December, about $5.7 B worth of bitcoin’ options contracts will expire on Deribit Exchange.

The notional value of all expirations is approximately $10.7B. So comparing to 31 DEC‘s notional value, we can call it a massive expiry. The ‘max pain’ price is $48k. Moreover, the Call sellers for the $58k & $60k strike prices are not optimistic about a possible end-of-the-year Santa rally. Therefore, a high level of volatility is expected in the market in the coming days.

btcusd-dec26-p1

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Technical Analysis

Following the recent drop from the ATH set in November, bitcoin broke above the MA-21 line by a 14% daily candle this week.

The Momentum indicator is above the zero-baseline, which could signify that the bulls are gradually stepping back into the market.

btcusd-dec26-p5

Short-Term Technical Analysis: The 1-Hour Chart

Following its recent daily uptrend, the BTC price is now retesting the most recent short-term support levels on the lower timeframe.

After getting rejected by the MA200 line on the 4-hour timeframe, the price is expected to find support at the static zone (marked by green area), which has played an essential role since hitting $42K. Any drop towards the $48.7K – $49.5K levels (yellow circle) will be considered a healthy correction to gain the required momentum before continuing the price recovery.

btcusd-dec26-p4

Onchain Analysis

The NVT Ratio values the Bitcoin network using the investor volume as seen on the blockchain. NVT Ratio is the ratio of on-chain volume to its market cap, something like a PE Ratio.

The NVT price level has been a useful BUY/SELL indicator for mid-term investors. Historically, whenever market price remained below the NVT price for an extended timeframe, later it had proven to be a great chance to accumulate more Bitcoin.

btcusd-dec26-p2

The above analysis was complied by analysts @GrizzlyBTClover, @N__E__D__A, and @CryptoVizArt exclusively for CryptoPotato.

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Cryptocurrency charts by TradingView.





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