Bitcoin’s bull move might not be over yet — Here are 3 reasons why

The bullish momentum that propelled Bitcoin (BTC) terms to a year-to-date precocious continues into its 3rd week arsenic the terms presses toward the $35,000 handle. 

Some notable developments that backmost the existent bullish momentum are:

• The forming a aureate transverse betwixt the 50-day moving mean and 200-day moving mean connected the regular timeframe.

• Liquidity maps from DecenTrader and Kingfisher highlighting the imaginable for a abbreviated compression betwixt the $36,300 and $40,000 scope if Bitcoin terms manages to blitz the $36,300 level.

— Decentrader (@decentrader) October 26, 2023

• Options marketplace information highlighting a displacement successful investors’ sentiment and positioning.

Bitcoin’s options information appears confluent with the position that further terms upside could beryllium successful store and suggests a imaginable hold of past week’s gamma lawsuit culminating with BTC terms rallying to $35,280. The information besides shows the anticipation for a gamma lawsuit successful the $35,000 to $40,000 range, and capitalist positioning has shifted accordingly.

In the past week, regular enactment volumes crossed the derivatives marketplace surged, starring The Big Picture podcast big Joe Kruy to say:

“Paradigm had its champion time ever by 70%, successful presumption of volume.”

Paradigm regular enactment volumes (USD). Source: Paradigm

Adding to the speech connected the Bitcoin options market, Kelly Greer, Head of America Sales astatine Galaxy said:

“The flows that we’ve seen bespeak everything that is illustrated present and what’s successful the marketplace successful the listed space. An uptick period implicit period from Q3 to Q4, involvement successful the calls that we’ve been highlighting and arsenic we started highlighting this abbreviated gamma, the noticeable quality betwixt Bitcoin and ETH successful aboriginal October, really was the archetypal clip we started talking astir this. It was unthinkable to spot that play retired erstwhile we got the catalyst for spot to interruption retired implicit its scope and spot the chasing successful spot. And spot spot settee down successful the mid $30; from erstwhile we started talking astir it, it was mid-$25s. We’ve seen involvement successful upside present that vol is higher and calls skews are a small elevated. Seeing those strikes rotation retired truthful that highest gamma astatine the clip erstwhile we discussed this successful aboriginal October was astir $32K and present it's astir $36K to $40K.”

From the position of method analysis, traders are eyeballing the bull pennant pattern, which has formed connected the regular timeframe, on with the commencement of a aureate cross.

BTC/USDT 1-day chart. Source: TradingView

In the short-term, the catalyzing determination to beryllium connected the ticker for is whether oregon not a terms determination done the $36,300 level leads to escalating unit connected shorts, and if this triggers a accelerated uptick successful spot buying volumes arsenic options and perpetual futures traders are forced to screen their positions oregon look liquidation.

Essentially, 1 would spot aggregated abbreviated liquidations surge arsenic spot volumes peak, a process that is documented successful the illustration below.

BTC/USDT astatine Binance Futures. 12 hr chart. Source: Velo

According to Alex Thorn, Head of Firmwide Research astatine Galaxy, “the Bitcoin gamma compression from past week could hap again if BTC/USD moves higher to $35,750 - $36K.”

Thorn explained that:

“Options dealers volition request to bargain $20 cardinal successful spot BTC for each 1% upside move, which could origin explosiveness if we statesman to determination up towards those levels.”

Total trader gamma astatine Spot BTC levels. Source: Galaxy

Explanation of gamma successful the BTC options market. Source: Alex Thorn / X

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.