By CCN: on May 27, the price of bitcoin rose from $ 8,000 to $ 8,939 in major exchanges such as Bitstamp and Coinbase, reaching a new high in 2019.
The key catalysts behind the steep increase in the price of bitcoin in a short period of time are unclear; Some have suggested the general improvement of confidence in the cryptography market and the increase in demand from retail investors.
One of the main factors behind the 11 percent bitcoin rally may have been the settlement of hundreds of millions of dollars in short contracts in BitMEX, the most widely used encryption margin trading platform.
As the price of bitcoin initially climbed above $ 8,500, it settled many short contracts submitted by bears that anticipated that BTC would fall into an expected withdrawal.
Could the CME bitcoin futures market be another catalyst?
The overnight increase in the bitcoin price occurred on a Sunday night in the US market, when the CME bitcoin futures market closed and other investment vehicles such as Bitcoin Investment Trust (GBTC) are not traded. ) of Grayscale.
Although the impact of CME on the price of the dominant cryptocurrency was largely ruled out until early 2018, new research from Bitwise Asset Management revealed that CME accounts for almost half of all BTC spot transactions.
On May 14, the daily volume of the CCO bitcoin futures market reached 1,300 million dollars, its historical maximum. Currently, the verifiable daily spot volume of bitcoin is estimated at around $ 1.7 billion.
If the liquidation of BitMEX contracts raised the price of bitcoin in the last 24 hours, considering that CME's futures market represents a large part of BTC's overall volume, CME could serve as a catalyst for the next potential upside movement. BTC
CME Bitcoin futures hit a record high of 33.7K contracts on May 13 (equivalent to 168K bitcoin), almost 50% more than the last record of 22.5K contracts on April 4. See how market participants are using $ BTC to manage the uncertainty: https://t.co/hDgraMj5pe pic.twitter.com/ct1xkjoJDF
– CMEGroup (@CMEGroup) May 13, 2019
As seen in the abrupt drop in the bitcoin price from $ 8,000 to $ 6,400 on May 17 triggered by the liquidation of BitMEX contracts, the futures market and the margin trading platforms have a significant effect on the outlook of the crypto exchange market.
Can you keep up the momentum?
The volume's sustainability in CME, BitMEX and other major exchanges would dictate BTC's short-term trend.
According to the performance of the asset in the last two weeks and the presence of little resistance above $ 8,500, analysts expect the asset to test the level of $ 10,000 in the medium term.
Tim Draper, a multi-billion dollar investor, said on Bloomberg that, fundamentally, Bitcoin remains strong against the fiat currencies with a bright long-term outlook.
The He said:
When people ask, then, what do you think has happened with bitcoin? & # 39; I say well, a bitcoin is still a bitcoin. It always has been and always will be. There are only 21 million of them and you should probably get one instead of thinking or comparing it with the fiat currency.
I look at the coins and say that all the other currencies are very volatile against Bitcoin because they know that this is really transforming the world. And so, these currencies that are linked to political forces or dictatorships or even the dollar, which really has political influence and monetary policy have to be so precise to do it well, why bother?
It is possible that the impetus of the cryptographic market continues to drive the bitcoin up even though some technical indicators indicate oversold conditions for quite some time.