Bitcoin (BTC) has been unable to break out of its downtrend since October. After the major crash, which saw it fall to the $80,000 mark, BTC has closed every month in the red since then.
At this point, the risk of Bitcoin closing January in the red is increasing, and BTC is heading towards its first four-month losing streak since 2018.
According to market analyst James Van Straten, Bitcoin is at risk of experiencing its fourth consecutive monthly decline, a series of losses not seen since the six-month drop in 2018.
Bitcoin has fallen by approximately 36% since reaching its all-time high last October. This downward trend continued in November and December, both of which ended in negative territory.
The analyst noted that such a prolonged decline hadn’t been seen even during the severe market crash of the 2022 bear market.
At this point, the analyst noted that even during the 2022 bear market, when Bitcoin fell from $69,000 to $15,000 due to monetary tightening and sudden bankruptcies in the crypto sector, it did not experience a negative trend for more than three consecutive months.
However, according to the analyst, while weakness prevails in the spot Bitcoin market, derivatives markets are showing cautious optimism.
According to Deribit data, options positions are indicating an upward movement towards the end of the month.
A significant number of Bitcoin options will expire on January 30th, with the $100,000 call option holding the highest value, boasting a nominal worth of nearly $900 million.
This indicates that a significant group of investors expects a substantial recovery in Bitcoin. Analysts interpret the activity in the options market as a sign that, despite weakness in spot prices, the expectation of a limited upside continues. However, given the potential for increased volatility until the end of January, attention is focused on the end-of-month close.
Because the maximum pain price for the January 30th expiry is around $90,000, the price may rise towards this level as the expiry date approaches.
*This is not investment advice.
