Bitcoin Bulls Jump & Sustain Above 100-DMAs And Reclaims $8.5k, FxWirePro Long Hedges On Track Of Delivering Desired Outcome

Bitcoin price (BTCUSD) was so far oscillating between $6,425 - $7,870 levels from the last 2-months or so. But the pioneer cryptocurrency pair has now broken out this tight range upon the frequent formations of bullish engulfing patterns at $7,286, $7,509 & $7,338.91 levels.

As a result, bulls shrug-off shooting star, the minor trend bounces back above 100-DMAs (white curve) and reclaims $8.5k level. While both the leading oscillators & lagging indicators signal bullish bias.

On a broader perspective, during H1 of the year, 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 during this period. Whereas, shooting star followed by hanging man patterns plummet prices below EMAs (refer weekly plotting), hammer & dragonfly doji candles counter these price slumps, consequently, the major trend jumps above 21-EMAs on this timeframe as well.

Fundamentally, we see some constructive underlying news to drive bullish cryptocurrencies, be it  BTC or be it ETH. Of late, the launch of new bitcoin derivatives products, like, futures and options contracts are available on the regulated firms like, CME and 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.

Indeed, a few months ago we noted that the true level of institutional participation was likely greater than widely used trading volume figures implied, as a number of sources suggested that only around 5% of reported trading volume aggregated across cryptocurrency exchanges was genuine. 

While the institutional industry players have begun speculating on CME’s launching news & perceived as a constructive driving force, the top-notch executives of JPMorgan Chase reckon that CME Group would be the frontrunner in the bitcoin futures contracts arena.

Hence, we positioned with the prudent longs in CME BTC Futures of January deliveries in our recent write-up on both hedging and trading grounds for targets up to $8,500 level (advocated when spot reference: $7,305). The underlying price of bitcoin (BTCUSD at Coinbase) has reclaimed up to $8.5k levels, we squared-off these trade positions by booking profits. During such bullish price action, one can easily make out that there’s been rising volumes and open interests in CME January contracts. Both on trading and hedging grounds, our long hedge strategy has served as foreseen before.

Currently, the pair is trading at $8,520 levels. On hedging grounds, we’ve maintained the same longs as we could foresee further upside risks.