FX.co ★ Technical Analysis of BTC/USD for April 22, 2021

Crypto Industry News:

This Friday, April 23, BTC options worth $ 1.55 billion will expire. The recent drop in bitcoin's price to $ 51,000 has given the bears a $ 340 million advantage.

Neutralization of exposure to options usually requires a dynamic hedging. This means that positions have to be adjusted in line with bitcoin's price.

Risk adjustments include selling BTC when the market is falling, which in turn increases pressure to liquidate long positions. Therefore, as the option expires on April 23 approaches, it makes sense to understand the current level of risk. Will the bears benefit from the $ 50,000 price tag?

Before the correction on April 18, BTC amassed 74% of profits in three months, reaching a record high of $ 64,900. The total value of the contracts that will expire on April 23 is 27,320 BTC, which is $ 1.55 billion at the current price of $ 56,500. However, bearish and bullish positions remain balanced as call options together account for 45% of open positions.

While the initial picture seems neutral, consider that the $ 64,000 and higher call option is almost worthless with less than three days remaining before expiration. A more bearish scenario draws when those 6,400 bullish contracts that are currently trading below $ 50 are removed.

Put options in terms of neutral to downtrend sentiment dominate with 70% of the remaining 19,930 BTC contracts. Given the current price of BTC, the open interest is $ 1.13 billion, giving the bears an edge of $ 450 million.

Technical Market Outlook:

The BTC/USD pair has made another lower low, so far a local one, with the low at the level of $52,502 and got back consolidating between the levels of $57,330 - $53,290. The bounce from the level of $50,313 had been capped at the level of $57,333, which is just below the 50% Fibonacci retracement of the last wave down seen at the level of $57,717 and it does not looks like the market is interested in testing the 61% Fibonacci retracement at the moment. The key short-term technical resistance is located at the level of $58,345 and the nearest technical support is seen at $55,501. The longer time frame chart still shows the up trend is intact.

Weekly Pivot Points:

WR3 - $77,128

WR2 - $70,098

WR1 - $62,765

Weekly Pivot - $56,867

WS1 - $48,657

WS2 - $42,481

WS3 - $34,723

Trading Recommendations:

The bulls are still in control of the Bitcoin market, so the up trend continues and the next long term target for Bitcoin is seen at the level of $70,000. Any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $50,000 is clearly broken on the e daily time frame chart.