Futures reports are a useful tool for traders, helping to gauge sentiment among major players and supplement the market view. On the mood among Bitcoin whales, ForkLog spoke with analyst Dmitry Perepelkin.
Bitcoin’s price breached the important psychological level of $10,000. The asset has remained within a range from $10,800 to $12,100 for a week since surpassing the key milestone. This suggests a likely move higher toward the next resistance at $14,000.
In the previous analytical note, attention was focused on a breakout above the upper boundary of the ‘Descending Triangle,’ which opened the road to $10,000.
Let us review what has been unfolding among the ranks of major market speculators and hedgers on CME, and how the balance of futures contracts has changed since July 14.
For the reporting period from July 14 to 21, in the Asset Managers section the number of long contracts rose (+41). All this occurred while the ‘Descending Triangle’ formation persisted, as the price moved toward the $8,900 support level. Therefore, even then, large players were accumulating long positions.
The Leveraged Funds section continued to show a substantial predominance of short contracts. In the still-falling market, that ratio was more than justified.
For the period from July 21 to 28, the Asset Manager section shows a sizable increase in both short and long contracts. Short contracts were opened 2.5 times more than long positions. This occurred during the testing of the key resistance level at $10,000.
It will be interesting to see the report due this Friday. It is quite likely that we will see a substantial reduction in holders of short contracts in both Asset Managers and Leveraged Funds.
On June 1, Bitcoin failed to break through $10,000. Over these two months, activity of traders on the Bitfinex exchange has declined markedly. This is evidenced by the horizontal BTCUSDSHORTS and BTCUSDLONGS lines on the chart below.
Since Bitcoin moved above the upper boundary of the Descending Triangle, activity has resumed. The chart shows a rise in long contracts on Bitfinex (+59.86%).
Thus, the market has revived. Bitfinex has become more active, and open interest together with daily trading volume on CME has risen significantly. The rise in open interest amid Bitcoin’s rally is a bullish signal.
There are no fundamental reasons for Bitcoin to fall today. The hash rate of the leading cryptocurrency is rising, and interest in alternative investments against the dollar is rising markedly. This is evidenced, in particular, by the dynamics of gold prices.
As the price rally unfolds, bitcoin futures trading volume exceeded $40 billion.
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