Bitcoin's recent rally above $84,000 has stalled, with the cryptocurrency now trading below $82,500 after a 0.3% decline over the past 24 hours. The failure to sustain gains above the $84,000 resistance level has left traders questioning the strength of the current bull run, especially given the significant influx of capital into US spot Bitcoin ETFs.
Data shows that US spot Bitcoin ETFs attracted approximately $526 million on Monday, followed by another $528 million on Wednesday, marking the largest daily net inflow since September 22. This combined $1 billion inflow helped turn weekly flows positive, yet Bitcoin's price has not responded with the expected upward momentum.
Technical Indicators Point to Waning Momentum
Technical analysis reveals a market lacking clear directional bias. The Relative Strength Index (RSI) sits at 56, just above the neutral 50, while the Stochastic oscillator reads 53. The MACD lines are also hovering near neutral levels, suggesting that while buyers remain in control, the bullish momentum is fading.
Bitcoin has been trading in a range between $84,000 and $80,000, with the bulls failing to overcome the sell wall at $84,261. A concentration of sell orders and liquidation levels above $84,000 and near $87,000 has complicated further gains, creating a formidable barrier for the bulls.
Futures and Options Market Dynamics
Futures open interest across major exchanges has climbed 4.2% from its October 12 low to $52.60 billion by October 20, and has since increased to $53.66 billion. However, this rise in open interest has not translated into a price breakout above $85,000.
The long-to-short ratio currently stands at 1.0133, indicating that bulls are still in control of the market. However, the recent decline could be attributed to traders positioning ahead of Friday's options expiry, which carries approximately $1.23 billion in notional open interest with a maximum pain price near $82,000.
The larger October 30 monthly expiry accounts for $11.2 billion in notional open interest, with its implied one-standard-deviation range extending from $78,300 to $87,100. This places the upper boundary close to the overhead selling zone, adding another layer of resistance.
Support Levels Under Scrutiny
With Bitcoin failing to take out the key resistance level below $85,000, traders are now watching to see if the support just below $80,000 holds. The $79,676 support level has held firmly during the last three pullbacks, and if it holds, it would allow the bulls to push higher towards the $84,261 resistance level once again.
A decisive daily candle close above this resistance could bring the $87,000 sell wall into focus. For now, Bitcoin seems to be ranging between $84,000 and $80,000, with no clear directional bias.
The recent ETF inflows have been a positive sign for the market, but the lack of price response suggests that other factors, such as options expiry and overhead sell orders, are currently weighing on Bitcoin's ability to break out. Investors will be closely monitoring whether the support at $79,676 holds in the near term.
This article is for informational purposes only and does not constitute financial advice.
