Bitcoin rises 5% in 3-hours; Is a $46,000 re-test near?

Lavina Daryanani
Source: CNBC

The crypto market stepped into Tuesday on a green note. The prices of most large-cap coins were up by 3%-8% on the daily window, thanks to the trend-setter Bitcoin.

After noting a daily incline of around 5%, the king coin had already breached $43k during the day’s trade.

The scent of Bitcoin’s green candles

After recording 5 back to back green candles on the hourly frame, BTC was seen catching its breath around $42.8k at the time of press. The Relative Strength Index indicator flashed an overbought reading of 72, indicating that momentum was still on the bull’s side.

However, over the past week whenever Bitcoin’s RSI reading crossed the 70’s threshold, the price did end up consolidating horizontally before inclining again. Thus, after witnessing a noteworthy pump in such a short timeframe, BTC is bound to spend some more time around $43k before taking its next step.

Source: TradingView

Thank the bullish bets being placed

The volatility in the crypto market has more often than not increased in and around the monthly options expiry period. This time around something similar has panned out. Bullish bets are being placed on Bitcoin for Friday’s expiry [25 March].

The call Open Interest is currently almost double of the put Open Interest [51.07k BTC v. 28.28k BTC], indicating the number of non-settled outstanding contracts where traders intend to purchase the right to buy BTC is fairly greater in number than the sell ones.

In fact, as far as the actual volumes are also concerned, calls [buy contracts] had an upper hand when compared to the put counterparts [2.5k BTC v. 1.3k BTC].

Source: CoinGlass

So, if the bullish sentiment continues getting intense, we might see traders buy BTC on Friday. In effect, the same could trigger a price upswing and BTC’s rally could persist. However, if things go haywire and bears regain control, then BTC’s price would start gliding down.