Yes, we've finally reached the last moments of the countdown, seeing the last digit '1'. The last week of the last month. As I expected last week, we witnessed a market-shaking decline. I've been writing for the last 3 weeks trying to warn you. Year-end and quarterly closings don't happen extremely high or low. If there were sharp rises or falls before, it will make its correction before closing. This week, similarly, I don't expect very high volume. With holidays in many places, I don't think we'll see extreme movements as the market is left to retail users. You can access my previous writing through my profile.
Bitcoin
On December 27th, the last Friday of this year, the yearly contract will close, and we'll see approximately $13.7 billion in Notional Value contracts expiring. After that, until New Year's, the market will likely remain quite inactive or might cause erratic movements to trigger stops for retail investors. Therefore, it might be more logical to use this period for relaxation or planning. Although we saw average volatility last week, monthly volatility remained well below expectations.
BTC started the week with a decline and is trading below its monthly opening. The monthly candle structure doesn't look very promising for an upward movement in its current state. We might see a series of declines until mid-January. Looking at this week's candle also suggests the decline will continue. I don't think the 92k bottoms will work as support anymore; 87k and the 77-80k region look good for buying. This week's implied volatility range is 110k-80k.
This week's Put/Call Ratio increased slightly to 0.68. Additionally, the Max Pain Price is at 84k. The fact that approximately $13.7 billion worth of contracts would suffer maximum losses at this price shows we should remain cautious.
Ethereum
The Notional Value of ETH contracts expiring on December 27th is approximately $3.8 billion. ETH, which remained much weaker than BTC during the recent decline, looks a bit stronger this week. It's trying to maintain the $3300 level. Monthly-wise, it has a relatively better appearance, but it's still not a very confident structure. A breakout creating a candle like November's wouldn't be surprising, nor would attempting to fill the gap in the 2800 region. Therefore, January might be good for volatility trading. During the decline, we saw volatility higher than implied volatility.
ETH, which fell below its monthly opening last week with the double top formation, started this week with an increase. Although the 3250 region seems to work well as support, it's quite likely for the price to go to 3700 and then attempt another low. Therefore, 3000 and the 2800 region shown by the blue box are areas I'm watching as support. This week's implied volatility is 3900-2650.
This week's Put/Call Ratio increased slightly to 0.4 but remains quite positive. The Max Pain Price is at $3000. However, there's a much higher Put/Call Ratio of 0.96 for the first 10 days of January. I also want to create a volatility trade for the first half of January. There's an expectation of a decline for when Trump takes office.
ETHBTC
My expectation was that it wouldn't close candles below the 0.0349 region and would form an Inverse H&S pattern, but this structure was broken with recent declines and daily closings. But I'm not losing hope. It looks like a weekly double bottom pattern might form. The weekly and monthly structure still appears inclined to turn positive. The fact that it hasn't reached the last low is quite positive for me. Therefore, I'll now take my upward positions on the ETH side with more confidence. I won't stop being cautious until it moves above the purple box.
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