Bitcoin (BTC) price continues to deviate from the $ 35,000 resistance level, falling below $ 30,000 over the night of January 22nd.

Since then, BTC has increased its losses slightly, reaching $ 31,500. However, given these prices, Bitcoin / dollar is approaching its worst week on record, losing over $ 5,000 in the past four days as bulls try to create new support at $ 32,000.

Bitcoin price plummeted overnight for three main reasons. First, the options market is overheating due to increased selling of options. Second, the critical resistance field is discarded. Third, the level of sales could instantly trigger panic.

More presentations in the options market
There are two types of contracts in the options market: buy and call. Groups are sales orders and calls are purchase orders.

According to Laevitas, a data mining platform, the nominal open interest in the options market is $ 3.1 billion with short-term sales. They said:

There is one week left before the January 29 contract expires on the Deribit exchange with an open nominal interest rate of over $ 3.1 billion. Max Pain – $ 28,000 – Will Mim Come True? Adjust the volume increase from yesterday, especially for short-term options. ”
The options market currently accounts for about 33% of open interest rates in the futures market. With open interest rates of over $ 3 billion, the options market can have a significant impact on the price of BTC.

Bitcoin options trading contracts. Source: Laevitas
Refusal of critical resistance, what’s next?
The $ 35,000 level was a critical area for short-term resistance. Once BTC rejected this level, it quickly dropped below $ 30,000.

Cryptocurrency analyst Scott Melker said Bitcoin has overcome the recession, albeit falling below its previous support zone. Therefore, if the bullish structure remains the same, we are likely to return to $ 35,000. He wrote:

“As usual, the week has gone a little deeper than expected, but it is on track. Moving the range down the square, bullish SFP and bullish move. Solid volume on SFP. I drew it yesterday and shared it live, not @ I’m too late. You are not from the forest. Distance “.

In the short term, traders are likely to look to the $ 35,000 level to confirm Bitcoin’s trend.

Panic selling followed when Bitcoin fell below $ 33,500, the previous support level. In fact, the Crypto Fear and Greed Index fell into “fear” for the first time since October after spending months in “extreme fear.”

A trader under the pseudonym “Kaleo” confirmed that market sentiment for cryptocurrency is tending to change rapidly. He said:

“If the price of bitcoin # drops to 20,000, it will be low enough that all your friends and family who have bought in the past few weeks will hate you. They won’t touch BTC anymore … it’s time to buy more for $ 50,000 or if they have to wait for another drop. ” …
However, the bullish catalyst for bitcoin in the short term is the continuing rise in gray tones from BTC. On January 19, the fund set a record of 16,244 BTC ($ 607 million) in one day out of stock, 18 times the number of new BTC mined in a day.

Source: CoinTelegraph