December was a tough month for Bitcoin, hitting a monthly low of just under $ 42,000 on December 4th. 2021 is still a day away and it looks like BTC will end the year below the $ 50,000 mark.
Options market analysis
An important factor to consider when analyzing the options market is the “maximum drop” – the price that offers the option buyer the maximum loss. The theory is that as the asset’s price approaches its expiration date, it will drop back to its maximum downside price.
Friday, December 31st, is the major expiration date with a face value of $ 5.4 billion on the Deribit Exchange. The maximum discount is $ 47,000. While it is difficult to speculate on the impact of such a large decline on the BTC market, it is better to be careful and take precautions (like stop loss) to avoid large losses.
Technical analysis
Weekly
After Bitcoin recorded its current ATH at $ 69,000 on November 10, it was quickly rejected and began a downward movement.
The MACD is also showing strong bearish divergence, a signal that often leads to a medium-term uptrend reversal.
Daily
Currently, BTC is below the 100-day MA (green line) and is struggling with the 200-day MA (purple line).
The 200 day MA has proven to be a historically important support / resistance. The blue trendline is the next major resistance for price right now, while the yellow trendline could be the next big support.
Further down, the USD 40-41,000 zone is currently the strongest support. If BTC falls below this zone, it can quickly drop to $ 30,000.
4 hours
After the recent shake, Bitcoin formed a reversing flag pattern (yellow trend line) and broke out above it. Then there was a nice pullback to the upper trendline – and a confirmed breakout.
However, the price has been rejected by the MA-200 and it looks like it has initiated another drop. Currently, the price is trading just above two major support levels – the blue trendline and the $ 45-46,000 zone.
You can see the BTC price here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
SN_Nour
According to Cryptopotato
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