Bitcoin price crossed the level of $9,400 for the first time in nearly 13 months. The last time the price was trading at these levels was back in May 2018. The crypto king is up nearly 145% year-to-date. It is leading the space in terms of percentage gains because Ethereum and Ripple’s XRP have soared 99% and 25% respectively. Ripple’s XRP experienced serious spike yesterday and jumped approximately 5%. It happened on the back of the news that MoneyGram will use XRP to settle its foreign exchange transaction. This is something which XRP protocol is best for- it improves the efficiency in terms of settlement.
Investors are feeling a lot more optimistic now because the resistance of $9,000 was important level and a break of this has encouraged traders to stay positive. Having said this, the most recent CFTC data released last week shows that the overall interest in the market was mainly on the short sides- meaning more traders took the short position. The non-commercial bullish percentage fell by -24%. As for the commercial, we saw nearly 101 short contracts and nothing on the long side. So, the overall picture showed that more traders went short than long and this means that the probability of Bitcoin’s price spiking to the upside is a lot more higher because higher price is likely to trigger a large number of stop losses.
Looking at the Bitcoin’s CME June future contract, it shows a bullish picture for two reasons. Firstly, the open interest rate is on the rise and it is also above the 15-day smooth moving average. Increase in the open interest rate usually means that new money is behind the current price move. The chart shows that the price of the bitcoin is trending to the upside. Finally, the (Bitcoin’s June contract) volume chart also confirms that the 15-day smooth moving average is in uptrend, but the current volume of 2641 is lower than the 15-day SMA reading of 4253. This calls for some caution.
In terms of technical analysis, the price has broken out of important resistance zone ( $9096 – $8769). The candle on the daily chart looks bearish, and usually when a candle like this forms after a long rally, it means a pull back. The Relative Strength Index RSI backs the argument of pullback because it is trading in over bought zone. However, the most important aspect is if the price fails to break below the resistance zone which is now acting like a support zone, it would be very positive because another lower low will be formed. In addition to this, do not forget that the 100-day moving average has crossed above the 200-day moving and the price is trading above the 50-day, 100-day and 200-day moving averages and this represents that the bulls are in full control of the price.
