Bitcoin Approaches Record Levels: 3 Levels to Watch

The price chart of Bitcoin (BTC) shows potential resistance above the $126,100 level. At the same time, the dynamics of the options market highlight $135,000 and $140,000 as critical points.

This analysis by CoinDesk analyst and Certified Market Technician Omkar Godbole addresses the levels investors should pay attention to during a period when Bitcoin is trading close to historical highs.

$126,100: This level represents the upper boundary of the expanding range pattern that has developed since mid-July. The potential resistance is defined by a trend line connecting the peaks of July 15 and August 14. A reversal from this level could lead to a pullback of the price towards the lower boundary of the range, as defined by the trend line drawn from the lows of August 3 and September 1.

$135,000: A breakout from the expanding range would draw attention to $135,000. According to the activity in options traded on Deribit, market makers have a net long gamma position at this level. Market makers tend to trade against the market direction, which allows them to maintain neutral positions by buying at the lows and selling at the highs. Such hedging tends to reduce price volatility, suggesting that the $135,000 resistance could be effective during upward movements.

$140,000: Finally, the $140,000 level stands out as a critical point. According to Deribit data, the $140,000 strike call option at this level is the second most popular on the exchange, with more than $2 billion in nominal open interest. Open interest refers to the dollar value of options contracts that are active or open at a given time. Levels with large open interest tend to attract prices towards them. High open interest in call options indicates that many investors expect the spot price to approach or exceed this level. Additionally, large institutions selling these call options have incentives to keep the price below this level. The hedging and trading activities at this level may create resistance, making it difficult for the price to surpass it.