Author: Joshua Aldio, Business Associate Tokenomy
Disclaimer: Tokenomy does not provide any investment, financial, accounting, valuation, tax, legal or other professional advice. The opinions expressed in the article is the author’s personal view only. All decisions to buy, sell or trade any Digital Asset using the Services are made solely by you, and you are fully responsible for all such decisions.
Bitcoin (BTC) returned to the $38,000 price level on the last day of January as selling pressure wears off after a rocky start to 2022 for Bitcoin prices. Historically, Bitcoin sees positive returns in February, which might give traders some hope as technical indicators suggest short-term buyers will stay active around the $35,000-$37,000 price support area, although upside looks to be limited at $45,000. Despite the recent spike in prices, some analysts are still skeptical of BTC due to the Biden administration who are preparing to release an executive order in February to regulate Bitcoin as a matter of national security.
The Bitcoin (BTC) price seems to be making a steady recovery, but there are some concerning indicators in the derivatives markets. At the moment, the futures and options markets are showing a lack of confidence from Bitcoin pro traders, although there is a positive spin to the data.
The road to $40,000 seems uncomfortably predictable, and cryptocurrency traders usually call it “manipulation” when such price movements happen.
Regardless of the rationale behind Bitcoin’s price recovery, investors should analyze derivatives markets to understand how whales, market makers and arbitrage desks are positioned.
While retail traders’ favorite instrument is the perpetual contract (inverse swaps), pro traders often opt for fixed-calendar futures and options. Although they are more complicated to trade, these derivatives offer more complex strategies.
Bitcoin Technical Analysis
Bitcoin is now rebounding towards $38,000; although the chart shows us that BTC/USDT is still on a downward trend with a more than 45 degree structure and is meeting the Fibonacci 38.2 ratio which indicates that bearish movement will occur in the future.
If we analyse the weekly time frame, there is a potential M pattern, signalling that there is a bearish movement. The $30,000 price level will be crucial as it is the last strongest price support.