Bitcoin (BTC) has recently experienced a brief drop below its crucial support level but has quickly rebounded to the current price of $27,300. This has resulted in the return of Call buyers, who are hoping that the level will hold and push the price upward. This has resulted in a fast-paced market, with Gamma Call buyers focusing on May 18-26th $28,000-$29,000 Calls and $28,000-$30,000 Call spreads, resulting in a net profit of $2,500, according to a recent analysis by Deribit Insight.
The Call Of The Hour
The recent surge in Call buying, although very near-dated, has resulted in an increase in the 7-14 day Implied Volatility (IV) after a weekend lull and pressure from the previous week. It is important to note that the $27,300 level is pivotal to the market’s performance, according to Deribit Insight. Being tested a couple of times already, a good push-up may compound confidence among investors. Vice versa, if the market fails to hold this level, it may result in a decline in the market’s confidence.
According to the analysis firm, Bitcoin’s net positioning still appears bullish, despite some setbacks in the market. Recently, there was news of a ‘fake’ government selling wallet, which temporarily dashed hopes for Bitcoin bulls. However, market participants are still looking for momentum to rebuild, and there are signs that bullish sentiment is still strong.
On the other hand, Bitcoin is facing stiff resistance ahead, particularly between the price range of $28,180 and $28,990. According to the crypto analyst Ali, this is a critical area where 1.24 million addresses have bought 973,220 BTC.
However, on the flip side, there is also a crucial support level at $26,490. Failing to hold above this level could trigger a steeper correction in Bitcoin’s price, potentially leading to a drop to $24,100 or $23,190, according to the analyst.
RSI Signals Strong Support At Key Level For Bitcoin
According to the crypto analyst Crypto Con, the weekly Bitcoin Relative Strength Index (RSI) is attempting to make support on a very significant level – the 56 RSI value line. This line has marked local bottoms for every bull cycle, suggesting that it is an important level of support for the cryptocurrency.
The more retests at this level, the healthier the price action is, as it indicates that buyers are willing to step in and support the market at this level. This is a positive sign for Bitcoin bulls, as it suggests that the current uptrend may continue for some time.
The growing adoption of Bitcoin as a store of value is another factor that may be driving bullish sentiment in the market. Many investors see Bitcoin as a viable alternative to traditional investments, especially in an environment of low-interest rates and high inflation. This sentiment is reflected in the significant milestone achieved, with more than 1 million wallets holding at least 1 BTC, according to Satoshi Club.
At the time of writing, the largest cryptocurrency by market cap is trading at $27,400, reflecting a 1.8% gain in the last 24 hours. However, the 50-day Moving Average (MA) currently stands at $27,600, which could act as a crucial resistance level that needs to be overcome if bulls wish to make another attempt at the $30,000 mark.
On the other hand, if Bitcoin experiences further price declines, the 200-day MA, indicated by the yellow line on the chart below, could serve as a significant threshold for the cryptocurrency. This key level, located at $24,700, may halt any further price drops and prevent selling pressures from mounting in the near term and delaying Bitcoin’s bull run toward new highs.
Featured image from iStock, chart from TradingView.com