Bitcoin Market Update: BTC/USD may retest 2020 high as options trading volumes skyrocket

Bitcoin (BTC) settled below $11,000 after a short-lived spike above $11,400 on Monday, July 27. At the time of writing, BTC/USD is changing hands at $10,980, mostly unchanged both on a day-to-day basis and since the beginning of Wednesday. Bitcoin's market capitalization exceeded $200 billion, while its market share increased to 62.4%.

Bitcoin's on-chain data

According to the data provided by Intotheblock, 91% of all Bitcoin holders are making money at the current BTC price. It means that over 28 million BTC addresses contain coins purchased below the current price. Meanwhile, the 30-day volatility jumped above 31% from the record low of 15%. 

Bitcoin options and futures are in demand

The price rally is driven by a combination of technical and fundamental factors. Thus, the average daily trading of Bitcoin options of Deribit hit $539 million, which is more than double the previous record high.  The Panama-based trading platform for cryptocurrency derivatives reported that over 47 contracts for bitcoin options traded in a single day on Monday. 

Bitcoin futures are also in demand. Bakkt reported that over 11,700 Bitcoin futures contracts had been traded on Tuesday, which is also the highest number on record.

BTC/USD: Technical picture

On the intraday charts, BTC/USD is supported by a combination of 50-hour SMA and the lower line of the 1-hour Bollinger Band at $10,800. Once it is out of the way, the sell-off is likely to gain traction with the next focus on $10,500 that served as a strong resistance area during the previous recovery attempts. If it is broken 100-hour SMA at $10,300 will come into focus.

On the upside,  a sustainable move above $11,000 is needed for the upside to gain traction. The next resistance is created by the upper line of the 1-hour Bollinger Band at $11,140 and the recent high of $11,414.

BTC/USD 1-hour chart