By What Key Technical Levels Should Bitcoin Traders Watch After Crypto Price’s Recent Plunge?
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Bitcoin price volatility declined recently, as the digital currency has been trading within a relatively modest range over the last few days.
The digital currency, which was fluctuating close to $34,000 at the time of this writing, has not moved around much yesterday and early today, according to Coinbase BTC/USDT data provided by TradingView.
Since the cryptocurrency has been suffering from this malaise, one might wonder what technical levels traders should watch for next.
Investors Will Seek ‘Continued Momentum’ Above $32k, Says Analyst
Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, singled out a specific price level when offering technical analysis for bitcoin.
“Now that Bitcoin has broken out over the year to date highs ($32,000 resistance level), investors will look for continued momentum above that level,” he stated.
“Ideally it will hold that level if the price does decide to correct and test that previous resistance level and confirm it as new support,” Sifling added.
Derivatives Data Shows ‘Major’ Support Levels
Greg Magadini, Director of Derivatives for digital asset provider Amberdata, offered commentary on bitcoin‘s key technical levels.
When developing a response to my questions, Magadini focused on data related to derivatives, which are basically risk management tools that market participants use to fulfill their investment objectives.
One kind of derivative contract is an option contract, which gives the holder the right, but not the obligation, to purchase an underlying asset at a predetermined price.
“Option traders are positioned for BTC to move! Especially in the EOY DEC expiration cycle, traders are positioned into 2 major zones,” he stated.
Further, Magadini claimed that “Major resistance is found at: $37k then $45k.”
“The $40k DEC expiration has a large concentration negative dealer gamma… as traders have been buying 40k call options expecting follow through as hopes for the SPOT bitcoin ETF grow louder,” he added.
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