The price of Bitcoin, while not yet ascending to the desired resistance level of ZAR 711,760 (USD 38,000), is nonetheless retaining its position above ZAR 561,600 (USD 30,000). The bulls appear comfortable with this stability, allowing for a period of consolidation in preparation for a forecasted breakout above the 12-month high of ZAR 589,761.76 (USD 31,428), according to data tracked by CoinGape.
In the prior analysis, it was suggested that Bitcoin only needs to maintain its position above ZAR 561,600 this week to enable more investors to climb aboard, thus generating adequate momentum to challenge the seller congestion within the ZAR 580,920 to ZAR 599,040 (USD 31,000 to USD 32,000) range.
Over the last 24 hours, the Bitcoin price has experienced a modest 0.6% gain while boasting a 13% uptick over the past week. The market dominance of Bitcoin continues to expand, now standing at a staggering ZAR 11,059,200,000,000 (USD 590 billion), a significant increase from ZAR 5,677,360,000,000 (USD 303 billion) following the FTX-triggered crash in November. The market outlook in the short term is anticipated to remain largely bullish.
Bitcoin Price Could Encounter Volatility Before Ascending to ZAR 711,760
Despite the current tranquillity within the crypto market, Deribit’s Chief Risk Officer, Shaun Fernando, recently illuminated the ‘max pain’ threshold for Bitcoin in a commentary shared with CoinDesk.
This pivotal market point could deliver maximum financial damage to option holders while concurrently presenting maximum earnings potential for option sellers. Fernando indicated that this threshold currently resides at a Bitcoin price of ZAR 486,720 (USD 26,000). He theorised that reaching this price level would likely alleviate some of the downward pressure on Bitcoin following the forthcoming options expiration.
In his written statement, Fernando explained, “With a remarkable open interest of over ZAR 6,552,000,000 (USD 350 million) at the 30k strike, the nearing quarterly expiration promises a thrilling finale, carrying the potential for price volatility amidst diverse gamma hedging strategies.”
Charting the Next Few Days to Maximise the Bitcoin Price’s Bullish Prospects
The Bitcoin price is sustaining its uptrend, supported by a buy signal from the Moving Average Convergence Divergence (MACD) indicator. If the ZAR 561,600 (USD 30,000) support level is staunchly defended, Bitcoin will continue to attract more investors, both retail and institutional, inviting them to embark before the ship sails too far.
Provided the MACD line in blue remains above the signal line in red, the probability will continue favouring the bulls. Furthermore, Bitcoin’s position above all applied moving averages, encompassing the 50-day EMA (red), the 100-day EMA (blue), and the 200-day EMA (purple), strengthens the burgeoning bullish control.
However, despite Bitcoin’s ongoing consolidation above ZAR 561,600, investors need to remain vigilant. This cautionary note follows the Relative Strength Index (RSI) retraction from the overbought region into neutral territory.
If this pullback continues, it might necessitate fresh strategies to avoid getting ensnared in a bull trap market situation, where abrupt declines
*All currencies in the article have been converted to the South African Rand