Bitcoin Futures started trading on the CME, the world’s largest futures exchange. This is the second exchange to offer bitcoin futures, further cementing the cryptocurrency’s legitimacy. The launch has gone fairly smoothly so far, which should bolster investor confidence. But with the noticeable rise of other cryptos, such as Bitcoin Cash, Ethereum and Ripple, can Bitcoin continue its impressive rally or has it gone up too high, too fast? So far, sentiment remains positive and investors’ appetite unquenchable, despite Bitcoin’s extreme volatility and past vulnerability. I personally do not think that Bitcoin is in a bubble yet, but once every Tom, Dick and Harry starts talking about it then you will know it is in a bubble. Even then, who could possibly know what the ultimate high will be?
But for now, BTC/USD still remains in a strong uptrend despite the consolidation. While Bitcoin futures climbed above the 20K market on its launch, the underlying asset has yet to hit that hurdle. But the relatively tight consolidation below this level means it could be a matter of time before price potentially tests this level. Indeed, we haven’t seen any distinct signs of reversal so far and all the key support levels remain intact. In fact, after the overnight drop, the cryptocurrency bounced nicely off a key support at 17900, which was previously resistance. In addition, a short-term bullish trend line which cut through this area also held firm.
Thus, going forward, 17900 will be the pivotal level to watch now as the bulls and bears battle it out. Only a decisive break below this level would mean the short-term bias would turn bearish. Meanwhile, on the upside, the key area to watch is between 18975 and 19275, which was formerly support, now offering a bit of resistance. The bulls require a move above this area soon, as this would indeed confirm that the overnight break below Sunday’s low of 18465 was just a run on stops rather than a break in market structure. If and when price breaks above here then there’s little further resistance until the 20K mark. Beyond this psychological hurdle are the Fibonacci extension levels of the most recent drop, at 20165 (127.2%) and 20800 (161.8%), where we may see some long-side profit-taking, should price get there in the first place.
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