As we near the end of the monthly candle from Bitcoin (BTC), There are signs of increasing volatility. Only four days until the long-awaited expiry of the CME futures contracts and deribit options. The short-term BTC price direction remains somewhat uncertain.
Three reasons for an increase in volatility over the next week are: the ongoing consolidation of BTC, a major overhead resistance level, and the substantial phasing out of BTC futures and options contracts.
Bitcoin has been consolidating for almost a week
August 17th The price of Bitcoin rose to $ 12,486 on Coinbase. reach a new high for the year. Since then, the price has consolidated in a tight range and has not broken back above USD 12,000.
When Bitcoin consolidates over long periods of time with no clear movement in either directiontends to see high volatility. Since August 19th The price of Bitcoin stayed in the 4.5% range, which is a narrow range for BTC.
The BTC / USD pair is approaching critical support. Source: TradingView.com, Mayne.
A pseudonymous trader known as “Mayne” He said the $ 11,650 support level was critical for BTC in the short term. Based on the support range of $ 11,650 to $ 11,730, the dealer said::
“If we can keep the gray, the wick in it could be a long driveway. I think we would go up to $ 12.1,000. Lose the gray, a short turn towards $ 11.1k “.
The expiration of the options is getting closer
Although the open interest in the Bitcoin options market for Deribit is not as high as it was in June, The August 28 contract has open options worth $ 500 million.
The simultaneous expiration of the August futures and options contracts it could trigger big moves in the price of Bitcoin. An options trader said::
“Not at the June level but still just over $ 0.5 billion of open interest in BTC options currently available on Deribit on August 28th.”
Josh Olszewicz, a renowned cryptocurrency technical analyst, indicated that the expiry of CME Bitcoin futures could also lead to intense price movements. said::
“CME BTC futs are this week. Expect much calamity. “
Bitcoin futures contracts on CME expire. Source: Josh Olszewicz.
Bitcoin must be above the $ 11,900 resistance level
Since the beginning of August Bitcoin’s price has declined the $ 11,900 level twice, with both seeing a relatively large sell-off shortly thereafter.
In the past 24 hours, Bitcoin fell again out of the resistance area between $ 11,800 and $ 11,900. If BTC continues to decline in the short term, it could print lower high formation on the shorter timeframe charts.
The fundamentals are falling slightly
According to researchers The fundamentals in the Glassnode chain fell slightly last week. They said:
Bitcoin’s on-chain fundamentals fell slightly in week 34. The GNI lost 6 points and fell from 71 to the current level of 65 points. This was mainly due to a decline in the sentiment sub-index while the network’s health and liquidity also decreased slightly. “
The coincidence of a small decline in fundamentals, prolonged consolidation, option expiration, and major short-term resistance increases the likelihood of a larger price reaction.