How Bitcoin’s [BTC] consolidation phase can yield profits for traders

ambcrypto.com:

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

The cryptocurrency market crash over the past few weeks has been brutal. In fact, none of the asset classes have survived the onslaught from the central bank interest rate hikes happening across the globe. And the correlation between traditional assets like equities and newer assets like cryptocurrencies has been increasing thanks to increasing institutional interest – which has doubled the pain for all investors.

However, there is still a way for you to make money out of this. But you’ll have to understand why first.

Broadly speaking, Bitcoin has been consolidating since 10 May, right after the major crash that pulled down prices from $47k to sub-$30k levels. But since 10 May, things have been more peaceful, so to speak. And it can be expected to remain so for a while now too.

BTC/USDT | Source: Tradingview

Bitcoin can be expected to stay in the narrow horizontal channel (white) for a while very simply because sentiments are weak and fresh buying or selling from these levels is going to be hard.

Options data for Bitcoin also points in a similar direction. According to data from Coinoptiontrack.com, Bitcoin is currently trading right on the point of max pain – typically the point where options tend to expire at.

Max Pain | Source: Coinoptiontrack.com

This data also shows there’s huge put open interest at the $29,000 strike with negligible call open interest, suggesting good support at those levels. While at the same time, the $31,000 strike has a decently high call open interest, while negligible put open interest – suggesting a resistance at that level. Why? Put and call option writers are