Cryptocurrency Derivatives Series: Ethereum On Verge Of 2Y Highs – FxWirePro’s Hedges Safeguard Upside Risks
Spotlight on Bakkt & CME BTC Futures With Mounting Institutional Interests As Bitcoin Bulls Halt $11k
Digital Currency Revolution Series: Spotlight On FxWirePro’s BTC Long Hedges As Bitcoin Explodes With Fresh 1-Year Highs
Digital Currency Revolution Series: Bitcoin On Verge Of 1-Year Highs, Alluring BTC Long Hedges
Bitcoin price action (BTCUSD at Coinbase) has been commendable since Covid19 saga, as it rebounds above $12k mark. Bulls are roaring on the verge of 1-year highs after decisive breakout of long-lasting range with the stern bullish candle on 27th (refer daily chart), technically, both leading & lagging indicators are also in line with the prevailing upswings.
On a wider perspective, BTC has spiked since mid-March, from $3,858 to the current highs of $11,820 which is 208% rallies. The major trend has also broken out of the range and retraced more than 50% Fibonacci levels of December 2018 lows to the all-time highs in 2017 (refer weekly plotting).
We, recently, saw along with such an upsurge in underlying price, Bakkt, the ICE’s subsidiary, has made commendable record numbers of trades for its monthly Bitcoin futures contracts as BTC prices is surging higher above $11,000 mark.
Hence, we have to position ourselves with the wide range of strategies that could ensure miners who wish to mitigate the risk of holding inventories. To do so, we’ve got various arrangements, such as, over-the-counter negotiations, cash-settled & physically-settled BTC futures contract, BTC options contracts, interest bearish BTC accounts and perpetual swaps etc.
Foreseeing further upside risks, the long hedges have already been advocated on hedging grounds using CME BTC Futures when the underlying BTC spot was trading at $4,927 levels, and we wish to uphold the same positions by rolling over August months tenors. It is unwise to keep speculating on the next upside target and accumulate fresh bitcoins or go for fresh short build-ups at this juncture. Instead, one can certainly uphold the above advocated long hedges for now (spot reference: 11,890 levels).