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Breaking News: Celsius Founder Alex Mashinsky Receives 12-Year Prison Sentence

Short-Term Bitcoin Rally Loses Steam, Uncertainty To Dominate Price Action?

Reynaldo Marquez
Reynaldo Marquez
2 years ago
2 mins read
Bitcoin

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Bitcoin (BTC) is back to its range after a failed attempt to reclaim previously lost territory, with a likelihood of seeing further losses. The crypto market has seen a weak price action in 2023, but BTC has been notably more fragile than other digital assets. 

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Research Firm Issues Warning For Bitcoin And ETH Investors Over DCG Situation

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As of this writing, Bitcoin trades at $16,800 with sideways movement in the last 24 hours. In the previous seven days, BTC records 1% in profits. Over the same period, Ethereum (ETH), Cardano (ADA), Litecoin (LTC), and others have seen gains north of 6% and 12%.

Bitcoin BTC BTCUSDT Chart 1
BTC’s price moving sideways on the daily chart. Source: BTCUSDT Tradingview

Bitcoin Investors Hedge Their Positions?

As price stalls in the Bitcoin spot market, the derivatives sector might provide more clues about price expectations. According to a recent report from crypto exchange Deribit, expectations of a spike in Volatility due to the New Year decreased. 

The report claims that market participants have been “hesitant” to jump into the current price action due to ambiguity around macroeconomic conditions. In addition, the crisis between Gemini and the Digital Currency Group (DCG) has added fuel to this sentiment. 

The DCG owns crypto lender Genesis, which owes Gemini Earn customers billions of dollars. If the first of these companies decides to liquidate one of their products to pay off their debt, the price of Bitcoin and other cryptocurrencies will likely trend to the downside. Deribit noted:

The Option market is dismissing material directional reaction to the Gemini-DCG deadline, and the relatively flat Skew across Terms is not signaling strong bias.

Implied Volatility, a measure of the market’s expectation around price movement, has declined. The option sector has been selling off under the current environment; the report notes some buying action around put (bearish) contracts for February and March. 

These contracts could be part of a hedging strategy from prominent players with Bitcoin spot positions. If the situation around DCG and Gemini resolves favorably, the market will likely trend higher. 

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Additional data provided by Deribit reflects the current state of the market, which is dominated by no clear direction. As seen in the chart below, there is a lot of Open Interest, predominantly call option, around $17,000. 

Bitcoin BTC BTCUSDT Chart 2 Options
Options set to expire on January 27 with a lot of open interest at $17,000. Source: Deribit

This data suggests that market participants expect sideways price action going into the January 27 expiry. As mentioned, the DCG/Gemini situation and macroeconomic developments could shift this situation. 

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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
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NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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