Bitcoin Price Reaches $6.1k, Market Waits for Next Move

Bitcoin’s (BTC) price has breached $6,000 in the early hours of May 9 (UTC), following several dogged attempts to get above the key level. The rally ended at exactly $6,100 on some exchanges (Bitstamp pictured below).

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A light support/resistance zone has formed around $5,960 is being tested at time of writing. The local uptrend and a couple of additional S/R areas lie just below, with $5,600 being the local bottom.

Although it is anybody’s guess whether or not the price rises can continue, one thing is certain: Bitcoin has finally and well entered a knot of serious resistance based on historical price action.

Whether or not Bitcoin’s rocket ship continues for a while longer, it does seem virtually impossible that this resistance will be completely broken now (say, somewhere above $6,500) without some cooling-off.

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Looking at some high time frame (HTF) charts - below the daily - we can see indicators suggesting that Bitcoin is getting overheated. Falling strength on the Relative Strength Index (RSI) may point to a coming correction; overall trading volume, however, has remained pretty strong and even growing since the April 2 pump that altered the course of Bitcoin. (Chart below again depicts Coinbase, a good representative of genuine trading volume.)

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This is to say that it is nowhere guaranteed that price has topped off, even in the short or medium term (the long term trend is almost certainly bullish now!).

If we take a moment to concentrate on a very HTF chart - below the weekly - we can see that Bitcoin’s RSI has broken clean through a critical resistance zone, which has a history all the way back to 2015(!).

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If Bitcoin were to correct here, we might easily expect a successful retest at around 52 on the RSI. Bitcoin had been stuck under this level for about a year and four months - now with the resistance cleanly broken, we may expect it to serve as new support.

No matter what happens, it now seems inconceivable that Bitcoin’s 2018 bear market is not definitively over - although nothing is impossible.

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

Large Investors’ Interest in Bitcoin Futures Is Growing, Says CME

The CME Group, a Chicago-based exchange operator that’s been offering bitcoin futures contracts since December of 2017, has revealed big investors are gaining interest in the product.

According to CoinDesk, the exchange revealed through a statement that the number of open contracts is up 61% since last year thanks to growing demand from intuitional investors. The number of outstanding positions rose to 4,629 contracts from 2,873 in the third quarter of last year.

This despite a significant drop in the price of bitcoin this quarter, as the flagship cryptocurrency is currently trading at around $8,300, down from a $13,800 peak this year. The average daily volume of contracts traded this quarter was of 5,534, or the equivalent of 27,670 bitcoin - $around $290 million.

CME added the volume is up 10% from the same period last year, and that institutional flow has been remaining strong.

Institutional flow remained strong, with 454 new accounts added, compared with 231 added in the third quarter of 2018.

The exchange reportedly further added that its investors holding more than 25 bitcoin, equivalent to around $200,000, rose to 47 from 45 in the second quarter of the year, and from 34 in Q3 of last year.

Around 50% of the trading volumes CME’s bitcoin futures contracts have been getting comes from outside the United States, with 26% being from Asia and 21% from Europe and the Middle East.

At the time CME launched its bitcoin futures contracts so did Cboe, another regulated exchange that suspended its BTC offering in March of this year. Presumably it dropped the offering because of low trading volumes.

The exchange now faces competition from Bakkt, however, the Intercontinental Exchange’s crypto venture that launched earlier this year. It offers physically-settled bitcoin futures contracts and has been seeing its trading volumes grow.

Featured image via Pixabay.