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Bullish Traders Push Bitcoin

The price of bitcoin (BTC) shot above $9,100 Wednesday in high-volume buying at around 10:00 UTC (6 a.m. ET) thanks to traders feeling optimistic about the crypto markets. 

As of 20:40 UTC (4:40 p.m. ET), bitcoin was trading at $9,162, gaining 3.5% over the previous 24 hours. Trading seems to support a higher upward climb as bitcoin’s price is now above its 10-day and 50-day moving averages, a signal of bullish sentiment.

TradingView

The question for the market is whether bitcoin’s price can continue to rise after Tuesday’s struggle to stay at $9,000. Traders like to talk about the $10,000 level as some kind of barrier to blow through that will result in new highs, but bitcoin hasn’t been able to push past that number since hitting it for a short time on May 7. 

“Bulls seem unable to break the $10,000 psychological support for some time since the halving,” said Peter Chen, a cryptocurrency trader at Hong Kong-based OneBitQuant.

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Bitcoin trading on Coinbase in May
Source: TradingView

Some are more optimistic. “Bitcoin must shine over the next 18 months, and I think it will. The short-term technical picture is not bad. Bitcoin is trading around where it was at the halving,” said George Clayton, managing partner at New York-based Cryptanalysis Capital. 

Bitcoin was as high as $9,184 on exchanges like Coinbase on May 11, the date of the network’s reward reduction event that happens every four years. During that recent halving miners’ rewards for successfully adding a block to the Bitcoin blockchain were cut 50% from 12.5 to 6.25 BTC. 

Elie Le Rest, a partner at France-based quantitative firm ExoAlpha, says the lower prices seen in the past few weeks were a bit of a post-halving slump. “We have witnessed the hashrate taking a breather and blocks taking longer to be mined immediately post-halving, which might explain some lack of enthusiasm,” Le Rest said. When looking at bitcoin price overlaid with the hashrate, price has stayed steady since the halving.

hashrateprice

Le Rest senses the post-halving hangover might continue, telling CoinDesk he expects record-setting bitcoin prices in the longer term. “We could be in for a correction in the short term before perhaps a bounce taking bitcoin to a new high in 2021,” Le Rest said. 

40,000 BTC in options expiring Friday

Meanwhile, the bitcoin options market has an event coming up this week, Singapore-based trading firm QCP Capital wrote in a recent market update. “Keep an eye out this Friday as over 40,000 BTC worth of options will be expiring,” the firm noted. 

As quantitative traders seeking to capture value in crypto volatility, QCP predicts more rocky price movements ahead. In fact, bitcoin’s at-the-money implied volatility, a measure of price movements, has dipped recently, according to data from aggregator Skew.

skew_btc_atm_implied_volatility
Bitcoin volatility in options over the past month

“We don’t see any particular catalyst for volatility, but with the futures basis drifting lower again and USDT [U.S. dollar-based tether stablecoins] back in prolonged discount territory, first time since mid-March, something might be brewing,” QCP noted. 

Other markets

Digital assets on CoinDesk’s big board are all in the green Wednesday. The second-largest cryptocurrency by market capitalization, ether (ETH), gained 3% in 24 hours as of 20:40 UTC (4:40 p.m. EDT). 

ethmay27

Cryptocurrency winners on the day include cardano (ADA) up 3.5%, litecoin (LTC) climbing 3% and monero (XMR) in the green 2.8%. All price changes were as of 20:40 UTC (4:40 p.m. EDT) Wednesday.

Source : coindesk.com

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