Cryptocurrency Derivatives Series: Bitcoin bulls in process of filling-up the gap of CME BTC Futures, Uphold long hedge

We, explicitly, highlighted in our previous post that Bitcoin price is due to fill-up gap-up that has formed on CME BTC Futures upon the BTCUSD’s upsurge of more than 42% during the course of last week of October. As rightly stated by us, the underlying price of BTC has slid a bit and currently 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.

However, we still reckon more upside traction for the underlying price of bitcoin as the 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.

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.

Hence, the pair (BTCUSD) has retraced towards $9k level which was in the process of filling-up the gap, now shows the firmness at the strong support at $9,000 – $9,021 areas.

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.