Key takeaways
BTC uptrend momentum has flipped to consolidation, and rising profit-taking may drag it to $110K or $105K. What’s subsequent?
Bitcoin [BTC] has dropped about 4% this week, stretching its pullback from the all-time excessive (ATH) of $123K to $114K – A 7% retracement.
General, the bullish uptrend in July has now shifted to a consolidation mode, famous famend BTC analyst Willy Woo.
He added that the asset may stay range-bound earlier than making an attempt one other breakout.
“Elevated hypothesis and profit-taking are dragging on momentum, signaling that BTC might have a reset or sideways grind earlier than the following breakout try.”
Supply: Swissblock
The connected chart confirmed excessive hypothesis (crimson) whereas profitability (SOPR, inexperienced) was elevated however steadily retreated as holders booked income.
Moreover, momentum flipped destructive, underscoring short-term warning.
Revenue-taking meets elevated hedging
Swissblock additional painted the colour of the present profit-taking, which surged to just about $3 billion per day on common in July.
This bolstered an analogous sell-off that marked the earlier native worth peak.
Supply: Swissblock
Nevertheless, the crypto analytics agency famous that the extent of present sell-offs was nonetheless not as intense because the late 2024, which hit over $4.5 billion.
As such, this could possibly be only a tactical cool-off, with an August breakout nonetheless on the playing cards, added Swissblock.
“Promoting strain is seen, however not excessive—suppose cooling, not capitulation…If macro/on-chain stays steady, a breakout reset is feasible in August.”
This was barely opposite to different market cycle top expectations by October amid growing macro uncertainty.
Even so, the latest dump was marked by a rise in demand for short-dated name choices (bullish bets), particularly for 1-week (blue), 1-month (purple), and 3-month (inexperienced) tenors.
This was proven by the BTC 25 delta skew, which jumped 4% to six% throughout the above tenors, underscoring a short-term bullish sentiment or brief overlaying.
Supply: Velo
In different phrases, Choices merchants anticipated a pointy rebound within the brief time period or hedged closely to cowl such a possible upside transfer.
On the identical time, Deribit data confirmed that $105K put choices had been probably the most traded quantity for the eighth and twenty second August expiries.
This meant that there was additionally heavy hedging for draw back threat to $105K and $110K, for the following two weeks.
Supply: Deribit
There was a surge in demand for calls eyeing $120K and $125K by the tip of August.
However the demand on the spot market has dropped and flashed crimson for the primary time since Might, in line with the Coinbase Premium Index (CPI).
This recommended that demand from U.S buyers has eased previously two weeks. A robust rebound on this metric may verify a possible try for a breakout.
Supply: CryptoQuant
General, BTC uptrend momentum has shifted amid a droop in spot demand and rising sell-off.
Whereas short-term appeared tactically bullish, Choices merchants ready for a possible dip to $105K and $110K.