Bitcoin Price Reaches $5.8K, Closes at New Year-to-Date High

Bitcoin (BTC) has closed the day of May 3 (UTC time) above the year-to-date (YTD) highs of about $5,630, locking in a new high for 2019 after yet another explosive day of price rise.

BTC is now snagged on an uptrending resistance line, albeit with the clear potential for a bull flag formation leading into another leg up.

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This monthly milestone for the leading crypto comes after closing out two fantastic months for the crypto markets in general, with explosive price rises both for Bitcoin and some leading altcoins.

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Yahoo Finance pointed out today that the last month has been the best month for Bitcoin this year, putting in a full 40% of gains since April 1. Many traders and analysts are, however, expecting very strong resistance to start checking BTC at $6,000. We can see, below, that the dense knot of late-2018 price history will comprise extremely tough resistance going forward from here.

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And the market seems to be staying cautious: short contracts are heavily outnumbering longs on Bitfinex, about 30,000 to 18,000 at time of writing. The shorts still have quite a long way to go, though, before reaching anywhere near historic highs. The opposite is true for longs, however, which are shockingly - and suspiciously - low respective to historical trends.

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In another milestone of the extremely bullish Q1 is Bitcoin’s weekly RSI performance. It has once again passed above the area of the low 50s, after spending more than a year below this level. We may well expect a retrace to be held at these RSI levels.

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(The views and opinions expressed here do not reflect that of and do not constitute financial advice. Always do your own research.)

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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