Key Points
- Bitcoin’s price has consolidated within the $100K-$105K range after Trump’s inauguration.
- Options traders see $90K and $96K as potential levels for price drops.
After the initial reaction to Trump’s inauguration, Bitcoin has managed to maintain its position above the $100K mark.
In the last couple of days, the cryptocurrency has been fluctuating between $100K and $105K.
Bitcoin’s Price Range
The recent price movement has been confined to the upper range of $90K-$108K. Despite this, key chart indicators have shown signs of weakening.
For example, the Directional Movement Index (DMI) indicates that short-term momentum has significantly decreased. This could encourage short-sellers.
The 4-hour RSI also dropped below 50, suggesting a decrease in demand, possibly due to caution following the inauguration.
These bearish indicators could threaten the $100K support and mid-range. If these levels are broken, Bitcoin could potentially drop to $96K or even $92K.
Liquidity and Future Market Outlook
However, the liquidation heatmap contradicts this outlook. There is a large pocket of liquidity at $109K, indicating that many traders are shorting the asset at its recent all-time high.
This large amount of liquidity could act as a price magnet, driving prices up and potentially defending the $100K level.
Despite the cautious sentiment in the spot markets, the Futures market remains bullish.
According to QCP Capital, there are more bullish bets than bearish ones on the Futures side.
Looking at Deribit’s next key Options’ expiry (31st January), the $110K and $120K levels have the highest Open Interest for calls, marking them as key bullish targets by the end of January.
On the downside, $90K (highest puts, bearish bets) and the max pain point of $96K are key levels expected by Options traders for potential sharp drops.
In conclusion, the market expects price swings within the $90K-108K range, with a possible deviation to $110K.
Please note that this information does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.