Bitcoin’s Feeble Bounce Fades as Options Bet on More Caution
Bitcoin remained under pressure on Tuesday, stalling after a brief recovery from a 10-month low.
Quick overview
- Bitcoin is currently trading around $78,500 after a brief recovery from a 10-month low.
- The market shows nervousness with significant put option concentrations indicating support at $75,000.
- Despite a temporary rally above $79,100, Bitcoin's gains were lost, and the implied volatility remains high at 48.8.
- A weekly close below $75,000 could negate signs of stabilization in the BTC options market.
Live BTC/USD Chart
Bitcoin remained under pressure on Tuesday, stalling after a brief recovery from a 10-month low. The cryptocurrency was trading at about $78,500, one day after negative sentiment almost driven it to its lowest point since US President Donald Trump took office again, more than a year ago.
Although put options, which are contracts that guard against downside risk, have become less common, strike price concentrations suggest the market remains nervous. According to Deribit data, the highest concentrations of put options point to buy-side support at $75,000, making it a crucial support level. On Monday, the token fell as low as $74,541 before rising again. $70,000 is the next crucial support level.
The BTC options market is showing signs of stabilizing as extreme downside fear begins to mean-revert, but this would be void if the weekly close fell below $75,000.
Bitcoin rallied as much as 1 percent, breaking above $79,100 before losing those gains. According to the charting tool TradingView, the cryptocurrency’s implied volatility index stayed high at about 48.8, comparable to Monday’s level.
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