This is an analysis post by Coindesk analyst and chartered market technician Omkar Godbole.
Like Bitcoin Trade on unprotected territory near record highs, dealers can search for signals about what comes next, especially key levels that can act as magnets or resistance points.
Here are three important levels worth looking closely.
$ 126,100
This level represents the upper limit of the extended or expanding range that has evolved since mid -July. The potential resistance is defined by the trend line connecting the heights on July 15 and August 14.
A turnaround from this level can trigger a corrective withdrawal down to the lower border of the area, represented by the trend line drawn from August 3 and September 1.
$ 135,000
A breakout from the expanding range would shift the focus to $ 135,000, with market manufacturers currently having a net long gamma position, according to activity in derived-listed options traced by amber data.
When market manufacturers are net long gamma, they tend to shop against the market direction-to buy on dips and sell at events to maintain their overall market-neutral exposure. Other things that are similar have this cover activity a tendency to cushion the pricing volatility.
In other words, the level of $ 135,000 could act as a resistance on the way higher.
$ 140,000
Finally, $ 140,000 appears as a key level, as data from Deribit shows a $ 140,000 data call is the second most popular on the stock exchange and has a nominal open interest rate of over $ 2 billion.
Notional Open Interest refers to the dollar value of the number of active or open options contracts at a given time.
Levels with large concentrations of open interest often act as magnets and draw the price of the underlying asset against them. A high open interest in call options suggests that many dealers expect the spot price to approach or top this level.
At the same time, those who have sold these calls often have large institutions, an incentive to keep the price during this strike. Their coverage and trading activity around this level can create resistance, making it harder for the price to break through.
