CME Bitcoin Futures hit a record in 1-day volume – could this see Bitcoin spiking up to $6,000? Bitcoin has been on a blazing rally since April 1st and is settling around $5,100, around 10% in growth. Could we see another 20% leap in the near future?
Other major cryptocurrencies such as Litecoin and Ethereum posted incredible gains against the USD – they’re following their leader, Bitcoin, on this move up. But what will it take for Bitcoin to move out of the $5,000 range to overtake $6,000? All combustion requires fuel – will CME be that for Bitcoin?
Bitcoin was able to spike past $4,200, and hit $4,800 within minutes due to some key factors:
- Bitcoin short contracts in the amount of $500 million were liquidated
- Single buyer purchased 20,000 BTC in the amount of $100 million USD
- Lack of resistance above $4,200
Traders are eyeing current Bitcoin levels because in order for Bitcoin to push past this range, it requires a strong impetus. Could we see more shorts in the future?
Currently, we’re looking towards the CME Bitcoin futures market and see whether or not it can be sustained – if so, the probability that the futures market serving as a catalyst for the next Bitcoin movement is high. On Tuesday, CME told Bloomberg that 22,542 Bitcoin contracts were traded, worth just over half a billion dollars USD.
Interestingly, most of that volume came during Asian trading hours – more than half of the daily volume. It is important to note that trades processed and executed during Asia hours does not necessarily translate to buyers in Asia, but it does increase the likelihood that the buyers were from important markets such as Japan and South Korea.
In the past, futures market volumes for Bitcoin was disregarded by many because of the inflated volume of the cryptocurrency exchange market. According to Bitwise, more than 95% of the Bitcoin volume is inflated or faked – this leaves the futures market responsible for around 35% of global Bitcoin volume.
17/ And, when you remove fake volume, CME and CBOE futures volume is significant ($91M), especially compared to the real spot volume (35% for Feb 2019).
This is good news because it means CME— a regulated, surveilled market— is of material size, which important for an ETF. pic.twitter.com/pVqMqPSZkt
— Bitwise (@BitwiseInvest) March 22, 2019
What’s certain is this: there is a strong rise in demand for Bitcoin in a very small and short time frame.