Bitcoin and its struggle with this level has been a topic of discussion for every trader, investor and analyst this year. The king coin comes back to test it as either support or resistance from time to time regardless of all its rallies.
Back again…?
Now the coin was in an ascending channel on a macro timeframe and it would have been expected to set $40,000 as concrete support. However, the price action of the past ten days has negated the possibility of this happening.
Bitcoin Price Action | Source: TradingView – AMBCrypto
After yesterday’s 5.7% drop, investors were expected to turn bearish or at least stick with their buying frenzy. Unfortunately, surprisingly, that won’t happen either.
HODLing intent, which gained strength towards the end of February, appears to have strengthened in March and April. During that period, 163,490 BTCs worth over $6.3 billion were bought by exchanges.
Bitcoin balances on exchanges | Source: Glassnode – AMBCrypto
This is because Bitcoin also started rising during this period, reaching $46,000 by the end of March. Of course, investors expected a bull run to ensue that would have propelled Bitcoin further towards $60,000.
A contract thing
This was also visible in Options Open Interest where the highest calls were placed at $60,000 followed by the second highest at $50,000.
On the contrary, those who understood the market and the practicalities made their puts at $40,000. Here a few thousand contracts were at $45,000, $44,000 and $42,000.
Bitcoin options open interest | Source: Skew-AMBCrypto
And with about 54,000 contracts expiring 48 hours from now, April 29th, it seems like the contracts will make some profit at $40,000, assuming they can actually go back up.
Price indicators were heavily bearish at press time, with the Parabolic SAR showing an active downtrend. This has also gained strength, according to the Average Directional Index.
Also, the odds of Bitcoin closing at $38,000 and $39,000 seemed much higher at 72% and 50%, respectively, than $40,000 (26%).
Bitcoin’s probability of hitting $40,000 is currently low | Source: Skew-AMBCrypto
Standing at $38,979 at the time of writing, Bitcoin still has an opportunity to tweak its trend. IF it can rally 2.34% over the next 24 hours.
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