The Bitcoin price has managed to sustain its position above the $30,000 mark, allowing bulls to enjoy some consolidation before an anticipated breakout above the 12-month high of $31,428. As we previously noted, the Bitcoin price only needs to maintain its level above $30,000 this week to attract more buyers, creating enough momentum to challenge seller congestion in the region between $31,000 and $32,000. In the last 24 hours, Bitcoin has gained only 0.6%, while posting a 13% uptick over the past week. With Bitcoin’s dominance continuing to grow, reaching $590 billion, up from $303 billion just after the FTX-triggered crash in November, the market outlook is likely to remain significantly bullish in the short term.
However, some turbulence may be on the horizon before we see the Bitcoin price lift to $38,000. In a recent commentary shared with CoinDesk, Deribit’s Chief Risk Officer, Shaun Fernando, highlighted the ‘max pain’ threshold for Bitcoin. This critical market juncture could inflict the greatest financial damage on option holders, while simultaneously providing the possibility of maximum earnings for option sellers. Fernando pointed out that this threshold currently lies at a Bitcoin price level of $26,000, suggesting that reaching this price would likely alleviate some of the downward pressure following the impending options expiration.
So, what should investors do in the next few days to make the most out of Bitcoin’s bullish outlook? One strategy is to focus on the buy signal from the Moving Average Convergence Divergence (MACD) indicator. If support at $30,000 is defended, Bitcoin will likely attract more both retail and institutional investors. If the MACD line (blue) stays above the signal line (red), the bullish momentum will continue. Furthermore, Bitcoin’s position above all applied moving averages, including the 50-day EMA (red), the 100-day EMA (blue), and the 200-day EMA (purple), reinforces the strengthening bullish grip.
Nonetheless, investors should remain cautious despite Bitcoin’s ongoing consolidation above $30,000. This caution stems from the Relative Strength Index (RSI) retracing from the overbought region into the neutral area. If this pullback persists, new approaches may be required to avoid getting caught in a bull trap market situation, where sudden declines below $30,000 could swing down to $25,000. Ultimately, navigating the upcoming days will be crucial for investors seeking to capitalize on Bitcoin’s current bullish trajectory.
Source: Coingape
