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).

9 may btc pa(source: TradingView.com)

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.

9 may btc pa(source: TradingView.com)

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.)

9 may btc pa(source: TradingView.com)

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(!).

9 may btc pa(source: TradingView.com)

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 CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Bitfinex Wants to Offer 100x Leverage For Crypto Derivatives Trading

Michael LaVere
  • Bitfinex will offer 100x leverage trading for cryptocurrency derivatives
  • According to the exchange's CTO, the hedging product is "ready for prime time"

Cryptocurrency exchange Bitfinex revealed it wants to offer derivatives products with up to 100x leverage for cryptocurrency traders. 

Hedging On Cryptocurrency Derivatives

Chief Technology Officer Paolo Ardoino told The Block on June 25 that the cryptocurrency exchange was ready to ship a 100x leverage product for certain users. According to the post, the project has been under development for some time and is “now ready for prime time.” 

The product was referenced in last month’s whitepaper published by Bitfinex for its $1 billion private token sale of LEO, stating

“Qualified Bitfinex account holders will be able to trade a new hedging product through a derivatives wallet.”

The whitepaper originally claimed that the new hedging mechanism would be released by the end of June, a timetable that fits with Ardoino’s “ready for prime time” statement. 

Ardoino confirmed that only “verified” customers will be allowed access to the product, given the risks involved in such highly leveraged trades. 

The CTO also took to Twitter to quell user concerns over Bitfinex’s existing 3.3x margin trading. Ardoino explained 100x leverage will be “optional,” and that their current leveraged trading products will be unaffected by the release. 

Big Risk, Big Reward

Bitfinex is looking to compete with rival exchange BitMEX, who already offers 100x leverage through its bitcoin perpetual swap contract. However, Bitfinex claims its product is designed as a legitimate hedging tool for clients, rather than a gambling mechanism. 

Max Boonen, CEO of trading firm B2C2, believes the product will only appeal to retail hedgers, as large investors will shy away from the risks involved in 100x trading. 

According to Boonen, 

“There’s nothing wrong inherently about 100x. But as a commercial hedger you want lower leverage margin. The larger investor wouldn’t want to take the risk of 100X, typically. They don’t want to go balls to the wall.”

The cryptocurrency derivatives market has been heating up. Last week bitcoin-bull Mike Novogratz’s Galaxy Digital announced plans to offer cryptocurrency options contracts.

Binance has also reportedly been exploring futures trading. On June 24, Binance CEO Changpeng Zhao tweeted the exchange had executed its first margin liquidation for a BTC short.