Bitcoin futures trading volumes on CME collapse adding woes to Bitcoin bulls

• CME registered the sharp decrease of Bitcoin futures trading volumes.
• BTC/USD locked in a tight range as $9,000 remains unbroken.

The volume of Bitcoin futures on CME has collapsed amid the massive deterioration of investor confidence and growing anti-risk sentiments. While the jury is still out on Bitcoin’s status as a safe-haven, the latest developments confirmed that the cryptocurrency moved in sync with risky assets such as equities. 

Bearish price momentum resulted in the depressed trading volumes on Bitcoin’s CME futures as investors preferred to withdraw from the market amid lack of clarity about Bitcoin’s price movements. According to Alex Krúger, a well-known cryptocurrency analyst, the trading volumes will continue falling down in tandem with the global meltdown. However, the CEO of Coinbase believes that loose monetary policy adopted by central banks around the globe will be beneficial for Bitcoin at the end of the day.

A down stock market and interest rate cuts may lead to growth in crypto this year. Governments around the world are likely to look to stimulate the economy in any way they can, including using quantitative easing and expanding the money supply (printing money), he said.

BTC/USD: Technical picture

At the time of writing, Bitcoin is trading at $8,800, mostly unchanged on a day-to-day basis and since the beginning of the day. The coin retreated from the intraday high of $8,847, while critical $9,000 remains out of Bitcoin bulls’ reach. The inability to clear this barrier bodes ill for Bitcoin buyers and signals that more sell-off may be in store for the asset.

On the intraday charts, BTC/USD recovery is effectively capped by SMA50 4-hour, which coincides with the above-mentioned intraday high. once this barrier is cleared, the upside momentum may gain traction with the next focus on $8,900 and, eventually $9,000, which is regarded as a key level for Bitcoin’s recovery. The next strong resistance comes at $9,300 (SMA100 4-hour, 38.2$ Fibo retracement for the downside move from July 2019 high to December 2019 low).

On the downside, BTC/USD is well supported by $9,700, This level is reinforced by SMA200 daily that has been limiting the decline since the beginning of the week. Once it is out of the way, the sell-off is likely to gain traction with the next focus on  $8,600.

BTC/USD 4-hour chart