Bitcoin’s bull move might not be over yet — Here are 3 reasons why
Bitcoin's options market positioning and the daily chart of BTC indicate the potential for another bullish move to occur.
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Bitcoin (BTC) continues its bullish momentum into the third week, approaching the $35,000 level. Several developments support this ongoing bullish trend:
1. The formation of a golden cross on the daily chart, where the 50-day moving average crosses above the 200-day moving average.
2. Liquidity maps from DecenTrader and Kingfisher suggest the potential for a short squeeze in the $36,300–$40,000 range if Bitcoin manages to surpass the $36,300 level.
3. Options market data indicates a shift in investor sentiment and positioning, with the possibility of a gamma event in the $35,000–$40,000 range.
Daily option volumes in the derivatives market have surged, with Paradigm experiencing its best day ever in terms of volume. Kelly Greer, head of America sales at Galaxy, noted that there has been a noticeable interest in call options and short gamma positions, especially as Bitcoin's volatility has increased.
From a technical analysis perspective, traders are monitoring the bull pennant pattern on the daily timeframe and the emergence of a golden cross, which are both positive signals.
In the short term, attention is focused on whether a move through the $36,300 level triggers a rapid uptick in spot buying volumes, as options and perpetual futures traders may need to cover their positions or face liquidation. This could lead to aggregated short liquidations surging as spot volumes peak.
According to Alex Thorn, head of firmwide research at Galaxy, a Bitcoin gamma squeeze similar to last week's could occur if BTC/USD moves higher to $35,750 - $36K. Options dealers may need to buy a significant amount of spot BTC for every 1% upside move, potentially causing explosive price movements as BTC approaches these levels.
In summary, the combination of technical indicators, options market data, and potential short squeezes suggests that Bitcoin's price may continue to experience upward momentum.
