That’s why Bitcoin MUST close above $40k on July 30th is what counts for its continued bullishness.
Whenever an asset is trying to break a consolidation band that was established 2-3 months ago, it usually takes more than just a bullish spike. Bitcoin spent more time between $30,000 and $40,000 than $40,000-$64,000 in recent weeks. And while the asset repeatedly bounces in the $30,000 range, breaking $40,000 is what counts for its continued bullishness.
While many expected smooth surfing above $40,000 when Bitcoin retested the band on July 26, the current cryptocurrency price is indicating something quite different.
A closer look at the 1-hour Bitcoin chart
As can be seen, Bitcoin tested $40,000 first on July 26, after which it saw a timely fix to $36,500. However, for market momentum to continue on an upward trajectory, the asset needed to break the threshold above $40,000 during its second retest. The price rebounded once more and, on July 29, was tested once more.
Now, over the past few hours, Bitcoin has fallen below a support band (highlighted on the chart), which had been held for 57 hours. The expected course would have been to go up, but now, it looks like it will reverse in the short term. Trading just above $38,500 so far, the correlation between the EMA-20 and the SMA-20 has also been bearish.
What triggered a decline?
Drawing inferences from Skew’s data, the massive Options expiration occurring in the next few hours may have had a role to play. According to the same, 47,300 Bitcoins are in the process of contract expiration on July 30th.
That’s why Bitcoin MUST close above $40k on July 30th.
Furthermore, as the chart suggests, put and put contracts have been nearly balanced, with put contracts slightly dominating procedures.
However, when viewed up close, it can be seen that more calls are being made at an exercise price of $40,000. This suggests an optimistic approach. With the fall in the price of cryptocurrency, the prevailing situation can be termed market disruption.
How does the interruption affect the short-term price of BTC?
At the moment, the long-term trend is still down, from which Bitcoin is trying to recover. The asset’s short-term bullish trajectory is also falling, with Bitcoin falling below $40,000. If the BTC closes the day below $40,000, most of the maturity would fall into a bearish squeeze. A contradiction between short-term and long-term scenarios generally causes the price to follow the long-term trend of the market.
Continued market disruption is leading Bitcoin now. If bulls fail to recover, Bitcoin could retest the price range close to $36,500.