Search ForexCrunch
  • Bitcoin managed to settle above $9,300, new strong barriers on the way.
  • Bitcoin’s futures and options expiration increase the volatility on the market.
  • BTC/USD needs to regain $9,600 to extend the recovery.

After a sharp sell-off at the beginning of the week, BTC/USD climbed back above $9,000 and made its way above another important resistance $9,300. A shall green candle on a weekly chart is a promising signal, though the market is still gripped with uncertainty at this stage. At the time of writing, BTC/USD is changing hands at $9,450 having gained nearly 3% on a week-on-week basis. Bitcoin’s market value settled at $173 billion, which is 65.9% of the total capitalization of all digital assets in circulation.

Beware, volatility ahead

The trading volume of Bitcoin options hit a new record high on the Chicago Mercantile Exchange (CME). According to data provided by a research company Skew, $60 million were traded on CME om Thursday, May 28, which is six times bigger from an average daily trading volume. Until now it was below $10 million per day. Open interest, ore the amount of Bitcoin held in the contracts that are set to expire, also climbed above climbing $250mln.

Notably, Bitcoin futures also expire on CME today. According to the statistical data provided by the exchange, the daily volume for Bitcoin futures reached 483 million, while open interest settled at $427 million.

Even though Bitcoin derivatives traded on CME a are cash-settled contracts, which means that no actual Bitcoin transactions are involved, the events often lead to increased market volatility. Moreover, according to the data, compiled by Cointelegraph and Arcane Research, BTC/USD tends to lose 2.3% of its value ahead of the expiration. 

Cardano and Theta – stellar altcoins of the week

Cardano (ADA) is the best-performing digital asset out of top-20 both on a day-to-day basis and on a weekly basis. The coin has gained over 10% in the recent 24 hours after IOHK CEO Charles Hoskinson announced the day of Shelley launch. The team plans to roll out the major upgrade for Cardano blockchain during the next month. Speaking on a crowdcast update, he specified  11 dates for the release that will start on June 9.

If everything works without a hitch, June 30 we’re shipping Shelley,” he added, saying that, if something goes wrong, it might get delayed to July 7. And users must update by July 20, he added.

The community was excited with the news and swiftly pushed ADA/USD above $0.06.

Theta also broke exciting news about Google partnership and received a lot of attention from the community. However, traders got disappointed once they found out that the “partnership” was not real. Theta/USD hit $0.5493 on Wednesday, May 27 and retreated to $0.3188 by the time of writing. Thus, the coin has lost nearly 50% from the recent peak. 

BTC/USD: Technical picture

Bitcoin returned to the area above $9,300 after a sharp sell-off to $8,637 and now the first digital asset has a good chance to finish the week in a green zone. However, it is still early to claim the victory over BTC bears as the price is still below the key technical area that separates it from a strong rally. 

From the long-term perspective, BTC/USD is trading above strong local support created by weekly SMA50 (currently at $8,850). This technical barrier has been verified on several occasions since the beginning of the month. Moreover, it is reinforced by the lower border of a triangle pattern that has been limiting BTC movements since the beginning of May.

A sustainable move below this area looks unlikely at this stage, though, if it happens, the sell-off may be extended towards $8,450 (the neckline of the double top formation on the daily chart) and down to $8,100-$8,000. This area includes 61.8% Fibo retracement for the downside move from February 2020 high, the lower line of the daily Bollinger Band and a bunch of daily SMA levels. This barrier will serve as the last backstop that separates BTC from correction from an extended decline.

On the upside, BTC/USD needs to push through a strong resistance area $9,500-$9,600 reinforced by an upper border of the above-mentioned triangle. Also, over 2 million BTC addresses have their breakeven point, which makes it a difficult task for the bulls. This is a critical resistance that separates us from a strong bullish rally towards $10,000. Once the bullish momentum gathers pace, the price will reach this barrier pretty quickly with this year’s high at $10,500 next in the line.

BTC/USD daily chart

The Forecast Poll showed the market expectations worsened during the previous week. While the forecast on a weekly chart remains bullish, both monthly and quarterly expectations shifted to neutral, which means that the experts do not expect a sustainable price increase both on the long-term and short-term timeframes. Also, the forecasted price is below $10,000 and mostly unchanged along the projecting horizon  It means that the market participants take a wait-and-see approach as the global situation and its outcomes for the cryptocurrency market are full of uncertainty.