Digital Currency Revolution Series: Bitcoin’s Flirting With Price Band Between $9k - $10k Continues – Uphold Long Hedges

After Bitcoin price (BTCUSD at Coinbase) has surged more than 42% from the last couple of days and been flirting with the price band between $9k and $10k levels since the last weekend (refer above chart).

Technically, we traced out hammer and bullish engulfing pattern candles at 7,515 and 7,630 levels respectively, consequently, you could see gap-up formation on CME Bitcoin Futures price chart which was expected to fill-in as shooting star hampers buying momentum as expected.

Well, after the break out of this prolonged range-bounded trend at beneath (refer oval shaped area in the 4H chart), the pioneer cryptocurrency has finally hit $10k but couldn’t sustain there. But from the last couple of days the pair has been maintaining above $9k mark 5th consecutive days in a row.

We reckon more upside traction for the underlying price of bitcoin as such bullish price is factored in some key news in the recent past. Firstly, the Chinese President’s commentaries, and the second one is that the mounting interests in Bakkt’s Futures volumes. The duos are driving the bitcoin’s upward price movement, this isn’t a vague price jump for no reason, never forget nothing moves without an underlying factor.

Some analysts have emphasized on the Chinese Prime Minister Xi Jingping’s statements last week. He called for China to boost its adoption of blockchain, and to increase its use within China’s government, industry, and technology sectors. Consequently, the statement seemed to have stimulated the constructive speculation amongst crypto market participants. 

Quite a few analysts are even suggesting the Chinese government is planning to accumulate Bitcoin, and others expecting a wave of new investment into Chinese blockchain companies.

Commentators have pointed out that President Xi’s comments referred specifically to blockchain technology - there was no mention of Chinese government interest in public blockchains like Bitcoin. This implies that the move was primarily driven by trader speculation as opposed to fundamentally led investors. It appears that it wasn’t only the Chinese news event driving the bullish price activity. 

On the flip side, Bakkt’s physically-settled bitcoin futures contracts have been steadily gaining interest as the market has seen a few new records since launching. Bakkt futures market hit an all-time volume high. 

There were sources of news to divulge it had conducted its first block trade while also seeing a 796% jump in futures trade volume in a one intra-day trading session. A little more than a week later, Bakkt contracts reached another milestone with 640 BTC swapped on October 23rd.

The CEO of CoinFLEX, Mr. Mark Lamb has projected for the 20X the size of the underlying spot BTC market by the end of 2020, amid the recent constrictive developments.

Overall, as we could foresee upside traction in the underlying price of BTCUSD, long hedges were advised in our recent posts. With a view of arresting upside risks we wish uphold the longs in CME BTC Futures of November’2019 month deliveries. Courtesy: Bakkt & BNC