Bitcoin price recently hit a new 52-week low at $17,600, suggesting the start of the next leg in the strong downtrend. With the bulls failing to register a reversal yet again, will we have a new low set by Bitcoin next week? Let’s take a look.
In last week’s analysis, we had expected Bitcoin to form a zone near the $20,000 level which seems to be the case as it has consolidated in this area in the past week.
Bitcoin price hit a new 52-week low of $17,600 on Saturday as it pierced through the support at $20,100. However, the bulls were quick to return to help the price climb back above $20,000. A worrisome sign for investors is the support of the altcoins being slowly broken as Ethereum sliced below the $1,000 mark and traded in three figures for the first time since January 2021.
Fortunately, a great sign for traders is that we can see a reverse head and shoulders pattern being formed, this could help Bitcoin flip the resistance at $22,500. Traders should wait for a confirmation of the pattern once a break-out from the base is seen as the buying volumes are still lacking.
This is why a confirmation should be awaited before any fresh buys. If Bitcoin is not able to register a strong bounce to $22,500 soon we may see yet another retest of the low set at $17,600.
Another reason why traders should be extra cautious is due to the expiry of $2.25B worth of options. After the deep sell-off seen on June 12, the expiry will mark huge profits for the bears (Put holders).
With the option chain showing interest with levels over $50,000, it has become clear that these calls will become worthless. With a close below $20,000, the bears expect a handsome profit of $620 million.
Traders can expect a volatile session soon as the bears will be trying to push the price below $20,000 for the ideal expiry whereas the bulls must be able to mark a close above $22,000.
With a close of above $22,000 at the time of expiry the bulls will save $140 million in losses.
However, it is not likely as the bulls do not have too much leverage available. This is because over $500 million in longs got liquidated on June 12 and 13 which will make it very tough for the bulls to push the price over $22,000. This is why we are expecting a close below $20,000 in favor of the bears.
Traders should be cautious of the last standing level of Bitcoin set at the current low of $17,600 as we may see yet another steep sell-off if Bitcoin is not able to sustain over the support level in the coming days.
It is still too early to say if this is the bottom as we are yet to see any bullish confirmations. We may see another round of ruthless selling in the coming days.
Bullish or bearish, you can still trade effortlessly and safely on CoinPanel, one of the best cryptocurrency trading platform, setting a Buy Full Trade (going long) if the market is expects an uptrend, or a Sell Full Trade (going short) if there is an indication of a downtrend.