TA Tuesday: Market stabilises with some expected volatility this week

At the time of writing, $BTC is trading at $46,620 (-1.79% in 7 days), $ETH is trading at $3,518 (+3.43% in 7 days), and the spread ETH/BTC is trading at 0.07547 (+5.24% in 7 days).

After a break of $BTC at $48k, bitcoin retraced back to $45k, and together with $ETH and other altcoins, traders seemed content to sit back and watch events unfold.

 

On the spot side:

As $BTC is still trading in a narrow spread, the $50k resistance seems to be a truly psychological level.

While major oscillators (RSI, CCI, etc.) are neutral, the moving averages as well as Ichimoku are in favour of a buy.

Unfortunately, my support and resistance bands are holding well since January when I first drew them. Then again, a break of $50k could rapidly bring us back to $60k.

Support: 42k (first) and 35k (second)

Resistance: 47k – 50k

 

 

On the derivatives side:

The futures and the options term-structures have steeped and are now showing a greater contango.

BTC Futures annualised 3mth Basis are currently trading at 4.65% on CME, while they were trading at 2.30% at the beginning of the month. Anyway, there is still a long way to go before we see trading at mid-October levels when the basis was at 14%.

BTC short-term volatility dipped by 10pts, while long-term volatility has not moved, suggesting that the spot price could consolidate within $40k – $50k for a few more weeks.

 

In terms of the medium/long-term perspective: the market is quite bullish as the long-term BTC options skew is finally trading at par.

The open interest profile shows once again protection at $40k (support) and upside exposure to $50k and $60k (resistance).

During the week, there has also been a large accumulation of upside exposure ($70k-$90k) for long-term maturities, incentivised as well by the low volatility price.

In other news:

– As many conferences are taking place (Bitcoin Miami, Crypto Compare in London, Crypto Assets Conference in Frankfurt, etc.) we might expect to see some volatility and directional moves as some traders (like myself) are away from their desk. And more news is likely to be announced (last year at Bitcoin Miami, El Salvador introduced bitcoin as legal tender).

UK’s Finance Minister announced that the UK will move to recognise stablecoins  as a valid form of payment, as the government plans to make UK a global cryptoasset technology hub

Elon Musk has bought a 9.2% stake in Twitter making him the largest shareholder; the stock gained 27% in the biggest rally since its IPO in 2013. $DOGE started trading higher as the community expects Musk to push for the introduction of the coin in the social network.

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