The price of Bitcoin (BTC) continues to show a bullish momentum, reaching a year-to-date high and inching closer to the $35,000 mark. Several factors contribute to this upward trend. Firstly, there is a golden cross formation between the 50-day moving average and the 200-day moving average on the daily timeframe. This indicates a strong bullish sentiment in the market.
Additionally, liquidity maps from DecenTrader and Kingfisher highlight the possibility of a short squeeze between the $36,300 and $40,000 range if Bitcoin manages to surpass the $36,300 level. These liquidity maps suggest that there is still substantial liquidity available for Bitcoin between the current price and up to $39,500.
Furthermore, options market data indicates a shift in investors’ sentiment and positioning. The data suggests that there could be further upside potential for Bitcoin’s price and a potential gamma event in the $35,000 to $40,000 range. This shift in sentiment is reflected in the surge in daily option volumes across the derivatives market. It indicates increased interest in calls and a noticeable difference between Bitcoin and Ethereum.
Kelly Greer, Head of America Sales at Galaxy, comments on the flows in the market and the interest in calls. She notes the increase in volatility and elevated call skews, indicating a growing interest in upside potential. The gamma peak, which was previously at $32,000, has now shifted to the $36,000 to $40,000 range.
From a technical analysis perspective, traders have identified a bull pennant pattern on the daily timeframe, combined with the formation of a golden cross. These technical indicators suggest further bullishness in the short-term.
In the short-term, traders are closely watching the $36,300 level. If the price breaks through this level, it could lead to a cascading effect of short liquidations and a rapid increase in spot buying volumes. Options and perpetual futures traders would be forced to cover their positions or face liquidation, driving up the spot volumes.
Alex Thorn, Head of Firmwide Research at Galaxy, believes that a Bitcoin gamma squeeze similar to the one seen last week could occur if the price moves higher to $35,750 – $36,000. He explains that options dealers would need to buy $20 million worth of spot BTC for every 1% increase in price, potentially causing explosive movements.
Overall, the current bullish momentum in Bitcoin is supported by technical indicators, liquidity maps, and options market data. However, it is important to note that every investment and trading move carries risks, and investors should conduct their own research before making any decisions.