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Bitcoin Corrections Appear To Be Healthy, Uphold Long Hedges
Bitcoin bullish price rout has completed saucer pattern chart formation and now halted at $10,522 level, the trend seems to be exhausted a bit to plunge below 7-DMAs and $10k level. Currently, hovering at 21DMAs, any sustenance can regain strength and stimulate rallies or breakdown below this pivot point may drag further slumps upto 9,000 areas.
BTCUSD has been oscillating between $10,500 - $9,600 levels from the last couple of weeks. During last H1 of the year (2019), the bitcoin price surged from the lows of $3,337 to the recent highs of $13,868 levels owing to the short squeezes and fresh long build ups amid buying sentiments.
As a result, we witnessed the mammoth returns of 315 in percentage terms that too within a span of 6 months or so, refer above technical chart).
Fundamentally, we kept observing some constructive underlying news to drive bullish prices, of late, the launch of new bitcoin derivatives products or bitcoin block reward halving event in coming May.
Futures and options contracts are available on the Intercontinental Exchange with the physical delivery facility in the Bakkt Warehouse. Like, the listing of the CME futures coincided with all-time highs in bitcoin prices, and researchers at the San Francisco Fed suggested that by providing a market where bearish positions could be more readily expressed the listing of these futures contributed to the reversal of bitcoin price dynamics. In a similar vein, it may be that the listing of physically settled futures contracts (that enables some holders of physical bitcoin e.g. miners to hedge exposures) that has contributed to recent price declines, rather than the low initial volumes.
Bitcoin price (BTCUSD at Coinbase exchange) has shown constant bullish steaks from the lows $6,401.24 levels to the recent highs of 10,522.51 levels and was on the verge of hitting 5-months highs. Minor corrections are quite healthy at this juncture for us to get a clarity on liquidity assurance.
Thus, the projection for the upside risks in the underlying security price up to the retest of $13k mark remains intact and accordingly, long hedges were advocated using CME BTC Futures. It is unwise to count the chickens before they hatch, if we keep speculating on the next upside target. Instead, uphold long hedges for now.
Fundamentally, with the Bitcoin Halving less than 3-months away and mounting speculation the halving may be a major catalyst for further bullish momentum the crypto markets have roared into life in Q1.
Upholding the above recommended positions is wise strategy by rolling over CME BTC Futures contracts of March deliveries on hedging grounds. Please be noted that on a fresh long build-up (rising price) coupled with the rising open interest and rising volumes is conducive factor from the contract holders’ perspectives.