Bitcoin's in 'Bull Market Territory', Prominent Trader Alex Krüger Argues

Omar Faridi

Prominent crypto analyst Alex Krüger has argued that bitcoin (BTC), the world’s most dominant cryptocurrency, is now in “bull market territory.” This, after BTC recently surpassed the $7,000 mark to reach a high of over $7,500. According to Krüger, key resistance levels to watch for the bitcoin price and other factors to consider are as follows:

Trading "Latest BTC Bull Run" Doesn’t Require “A Single Indicator”

On May 11, Krüger noted via Twitter that trading during the latest bitcoin bull run did not require “a single indicator.” He added that indicators may be too costly and that they’re often “used to find overbought signals.” Per the New York-based economist and crypto trader, indicators are also being used to track “divergences” in price movements and “to trade against the trend.”

Meanwhile, widely-followed crypto analyst, “The Crypto Dog” revealed he believes that we may be closing in on the “local top” for both the bitcoin price and bitcoin dominance:

Interestingly, 57% of Twitter users responding to Krüger’s survey, completed on May 9, 2019, believe that Bitcoin will trade as high $10,000 this year.

Bitcoin Will Represent “5% Market Share Of Earth”

As the crypto ecosystem appears to be recovering from the extended bear market, which lasted throughout 2018, several prominent investors have made some bullish bitcoin price predictions.

Legendary billionaire venture capitalist, Tim Draper, recently predicted that Bitcoin will account for “5% market share of the earth” within the next four years. The founder of Draper Associates also believes bitcoin's price will surge to $250,000 by 2022.

Meanwhile, Mark Yusko, the CEO of Morgan Creek Capital Management, has predicted that the bitcoin price could surge to $400,000. Yusko, whose comments came during an interview aired on Bloxlive.tv, noted that the damaging Binance hack, resulting in a loss of over 7,000 bitcoins, may have “confirmed” Bitcoin’s “value thesis.” The prominent investor explained that people normally “don't steal things that don't have value."

A $20,000 Bitcoin Price Prediction

As CryptoGlobe reported on May 11, the Canaccord Genuity Group, a Toronto-headquartered multinational, full-service investment bank focused on “growth companies,” has forecast a bitcoin price of $20,000 by 2021.

Analysts at Canaccord had conducted an extensive market analysis, which took into account bitcoin’s price movements over the course of two different four-year time periods, including 2011-2015 and 2015-2019. The firm’s analysis also took into consideration the halving of bitcoin miner rewards every four years, and how it may affect the cryptocurrency’s price.

CME Looks to Double Bitcoin Futures Limit, but Is This Wise?

The Chicago Mercantile Exchange (CME) has a new request for its regulator, as it looks to double open position limits on bitcoin futures contracts in the face of significant interest.

Nasdaq reports that the CME has already petitioned its regulatory body, the Commodity Futures Trading Commission (CTFC), asking for an increase from 1000 contracts per spot month to 2000 per investor. Each contract represents five BTC, so essentially, at its peak,  a single investor's total position may edge towards a monumental 10,000 BTC.

This is in direct response to the contract's recent growth which is currently depicting record levels of activity, citing $370 million being traded per day. A spokesperson for the CME noted that the idea to increase limits was proposed on the continued maturity of the market:

Based on the significant growth and acceptance of our financially-settled CME Bitcoin futures markets, as well as our analysis of the underlying bitcoin market.

However, as Nasdaq writes the increase in the upper limit of positions is somewhat superfluous. As of July, the number of open interest contracts reached an all-time high of just 6100; given this, it seems the CME may be future-proofing.

Open to Manipulation?

However, concerns remain about the limit increase, as without them, the potential for manipulation rises; often to the detriment to the underlying asset. Although, as per the CTFC website, the threat of manipulation from bitcoin futures contracts is "low":

In general, position limits are not needed for markets where the threat of market manipulation is non-existent or very low.

Instead, Nasdaq posited that this might point to a lessening on the CTFC's strict rule of bitcoin; as well as a maturing of the market in general.

Nevertheless, some believe the CME's bitcoin futures contracts do pose a significant threat to the price of BTC; with some suggesting that blatant manipulation continues unchecked within the market.

As reported, there seems to be a correlation between the expiry dates of CME bitcoin futures contracts and a lull in the price point of BTC. In several instances, a significant drop in bitcoin's price has coincided with a closure from the CME. The most recent example of this occurred on Labor Day, September 2, when bitcoin rose an extraordinary 8% shortly after the CME shut.

Crypto analyst, Alex Kruger, highlighted this, noting the large gaps which formed on the CME chart, from the price discrepancy before and after closing.

This has become a pretty accepted practice within the market. Kruger has even gone to the lengths of compiling statistics each time this phenomenon transpired:

On these occasions, bitcoin cited an average 4.6% price discrepancy following the close of the CME.

Whether this is a coincidence or the market is indeed being actively manipulated is as yet unclear. Either way, with the increase of these limits it might be only a matter of time until we know for sure.

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