Bitcoin continues to push towards $10k, despite being batted down from this level four times since the start of May.
The leading cryptocurrency made its last attempt to break through on Tuesday, before a sudden selloff caused the price to fall more than $800 in less than five minutes. Since then, Bitcoin has been creeping back towards $10k as little brother Ethereum inches towards its own resistance at $250.
Prices lingering below these key levels seems to be a bullish sign for institutions, with more big players entering the market this week amid fresh calls for higher prices from mainstream media.
This Week’s Highlights
- Bloomberg Bets on 20k Bitcoin
- Options Market Surges
Bloomberg Bets on 20k Bitcoin
Bloomberg Crypto has made a bold prediction about the future price of bitcoin.
The media outlet’s June 2020 Outlook claims bitcoin is set to benefit from “increasingly favorable technical and fundamental underpinnings”, and that the current sideways price action will form the “foundations for further price appreciation.”
This prediction is based on patterns of price action that followed the previous halving event in 2016. But unlike last time, Bloomberg expects bitcoin to break away from “the crypto gaggle” and cut ties with altcoins as it moves back to all-time highs.
Options Market Surges
One of the hallmarks of a mature market is the presence of options — derivatives contracts that give holders the right to buy or sell assets by a certain date.
Bitcoin options have shown solid growth this quarter, with institutional platform CME at the forefront of an increase in open interest in options across all exchanges, according to London data firm Skew.
Over the last month, the put-call open interest ratio has fallen from 0.81 to 0.41, indicating that call options are now more popular than puts. As traders typically buy calls when prices are expected to rise, this could be taken as a bullish sign.
The Week Ahead
The Federal Open Market Committee (FOMC) has a big meeting this week, which is set to conclude with a virtual press conference on Wednesday. In this presentation, Chairman Jerome Powell is expected to reaffirm the central bank’s commitment to supporting the economy with fiscal stimulus. More quantitative easing is likely to be bullish for equities, and could impact bitcoin which is also thought to benefit from central bank support,
Fireworks could be in store for cryptocurrency if the sideways price action of recent weeks comes to an end with bitcoin breaking above the top of the range at $10k, or the bottom at $8,800. After several weeks of price compression in this area, a move in either direction is likely to be explosive.
Written by a team of experienced financial analysts at eToro.
This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results.