Options Traders Validated: BTC Price Tests $82.5k Support
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- Bitcoin dipped to around $82.5k, testing the bottom of its support range after options expiry.
- Prior to the price drop, options data hinted at caution with put option premiums exceeding call options (P/C > 1).
- A ‘buy’ signal from the Hash Ribbon indicator was quickly followed by a price dip, and Bitcoin is now trading below EMA resistance.
Bitcoin (BTC) experienced a slight downturn late Friday, edging down to $82,550. This move sees Bitcoin testing the lower boundary of its recent trading range, fluctuating between $80,000 and $87,000, and marking a 0.65% decrease over the last 24 hours.
Interestingly, this downward price action occurred despite a historically bullish signal appearing just before. Adding to the market complexity, options market data has continued to reflect a cautious sentiment among traders, especially with the specter of new US tariffs looming over the market.
In fact, recent activity within the options market foreshadowed this very pullback. Insights from the blockchain analysis platform Glassnode revealed that put options were trading at a premium, highlighting a stronger demand for protection against potential price declines.
Analysis of Options Data
This trend is particularly pronounced in options expiring soon, indicating a level of unease not witnessed since Bitcoin hovered around the $20,000 mark in mid-2023.
This suggests that traders are actively hedging against potential price drops, which, in turn, could contribute to selling pressure in the short term.
Related: Arthur Hayes Says He ‘Loves Tariffs,’ Explains Why They Are Good for BTC
Further insights from journalist Colin Wu’s report indicated that 26,000 BTC options reached expiry on April 4. These options showed a put-call ratio of 1.24, suggesting a leaning towards bearish sentiment, and the point of maximum pain was around $84,000. Now that Bitcoin is trading below this “max pain” level, the price movements following this expiry could remain unstable.
Hash Ribbon Buy Signal Followed by Price Dip
Adding another layer to the current market situation, analyst Ted pointed out a ‘buy’ signal recently flashed by Bitcoin’s hash ribbon indicator.
Historically, this signal, which is related to mining activity, has often been a precursor to significant price increases. However, with the ensuing dip towards $82,550, the immediate reliability of this signal is being questioned. It’s possible the signal’s positive impact may simply be delayed.
Technicals Show EMA Resistance, Support Tested
Currently, Bitcoin is trading beneath its 20-day Exponential Moving Average (EMA), which was previously noted to be around $84,594. This EMA level is now functioning as a notable resistance point.
The Relative Strength Index (RSI), likely now lower than earlier reported neutral levels, mirrors this weakened price momentum. Despite this, there could still be underlying buying interest emerging near support levels.
Looking at Bollinger Bands, we can see Bitcoin approaching its lower band support level around $80,962. It’s crucial for Bitcoin to remain above the immediate $82k threshold and this lower band support to avoid deeper drops. Currently, resistance seems to be firmly placed at the 20-day EMA (~$84.6k) and the upper Bollinger Band (~$88k).
Macro Context: Tariffs Loom, BTC Acts as Risk Asset
The bigger picture for the global economy remains hazy. Adding to the mix, Michael Saylor’s observation that Bitcoin often behaves like other risk-based assets in the short term – meaning it gets sold off during times of panic – is particularly relevant now. Markets are on edge as they try to gauge the potential effects of President Trump’s newly announced tariffs, set at a minimum of 10% starting April 5th, with even higher rates hitting specific countries like Cambodia, Laos, and Madagascar.
Related: Bitcoin’s Trump Tariff Test: Down to $82k, Can $78k Support Endure?
These external economic pressures are definitely playing a role in the cautious trading environment we’re seeing.
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