Analyzing Bitcoin's January Monthly Expiry: What Key Levels Should Traders be Watching?

2 hour candle

Bitcoin's price action is at a critical juncture as we approach the Friday options expiry. After bouncing from $97K, BTC is now trading in the $100,000-$106,500 range. However, for sustained momentum, Bitcoin needs a strong close above $109K or below $97K. Until then, we could see sideways movement within this range.

Key Insights from Open Interest (OI) Analysis

1. Technical Levels to Watch

• Near-the-money (ATM) support: $99K

• Near-the-money resistance: $104K

• Out-of-the-money (OTM) support: $95K

• Out-of-the-money resistance: $110K

  
  

These levels indicate that the current trading range is well-defined, with Bitcoin facing strong resistance near $104K and a solid support base near $99K.

2. Open Interest (OI) Shifts and Market Sentiment

• The Put-Call Ratio (PCR) is 0.83, indicating a mildly bullish market sentiment.

• Significant put additions at $99K suggest traders protecting downside risks.

• Strong call additions above $110K indicate bulls expecting a breakout if price gains momentum.

  
  

Despite this bullish bias, Bitcoin needs a decisive move above $109K for a sustained rally, or below $97K for a stronger correction.

3. Market Sentiment and Expiry Impact

With options expiry approaching, market makers may try to push BTC towards the max pain level ($97K) to ensure most contracts expire worthless. However, if bullish momentum holds, Bitcoin could test $109K-$110K resistance.

Verdict: Sideways or Breakout?

Bitcoin is likely to consolidate between $97K-$109K unless a major breakout or breakdown occurs.

• Bullish case: If BTC closes above $109K, we could see a push toward $115K-$120K.

• Bearish case: If BTC breaks below $97K, expect a retest of $95K or lower levels.

  
  

For now, traders should watch for volume spikes and price action around key levels as expiry approaches.