There has been a renewed sense of optimism in the cryptocurrency space this week, as some key currencies have made significant moves to the upside. Bitcoin is leading the charge higher, having retaken the key 9k level.
Some indications point to an increasing interest in trading Bitcoin and other currencies. A recent article from investopdia.com alluded to this as it discussed record-breaking Bitcoin futures volume on the CBOE Exchange. The author stated:
“The popularity of trading bitcoin futures contracts (XBT) continues to scale new heights. On Wednesday, CBOE, the dominant U.S. derivatives exchange providing bitcoin futures contracts, saw its highest-ever trading volume for bitcoin futures since the launch of trading in December. (See also: How to Invest in Bitcoin Futures.)
A total of 19,000 bitcoin futures contracts belonging to different expiry dates exchanged hands on CBOE on Wednesday. Some 18,210 bitcoin futures were traded for the next month May expiry, another 703 that exchanged hands belonged to the midmonth June expiry cycle, while the rest 87 were of the far month July expiry. No contracts belonging to August expiry were traded Wednesday.
Wednesday’s record volume was three times higher than the average daily trading volume (ADTV) of 6,600 XBT Bitcoin Futures. Since ADTV indicates liquidity, it has an indirect impact on the price of the security. Thinly traded instruments are usually avoided by the active traders, leaving only a few to deal in them with wide spreads visible in the quoted prices. Increasing ADTV indicates more market participants are interested in trading the security, leading to tighter spreads and better price discovery.”
A convincing move back higher in cryptocurrencies could potentially fuel even more interest, as both traders and investors look to ride the next wave higher. For now, the 10k level in Bitcoin could be a make or break level for the space.
Bitcoin: Bitcoin remains the center of attention in the cryptocurrency market, having recently moved back above the 9k level. The currency could now be eyeing key resistance in the $9800 area. A test of this level could set the stage for price action over the next several weeks or months. A clean break above could potentially fuel enough buying interest to see a move back to previous all-time highs or even beyond.
Bitcoin Cash: This currency is seeing a solid end to the trading week, moving higher by nearly 5.5%. The currency seems to like the $1200-$1440 range, and is nor far from testing the top of the recent range. Further buying pressure could send the currency back to recent highs over the $1500 level.
Ethereum: This cryptocurrency is up nearly 7.5% in early action Friday, looking to finish the trading week on a good note. After seeing a drop from over $700 to around $600 earlier in the week, the currency has been trending higher as the sector has gained some steam.
Ethereum Classic: Like its counterpart Ethereum, Ethereum Classic is also seeing some upside to end the week. The currency is up over 10% and could be poised to challenge recent highs around $22.50 in the sessions ahead. The larger charts for the currency are also looking more constructive.
Ripple: This cryptocurrency has traded in about a $.15 range this week. The chart is improving, but the currency has yet to put together a convincing rally that could draw further buying interest. recent price action has done a lot to negate the currency’s downtrend, however, and the next several weeks could be important if the currency is going to stage a major reversal.
Litecoin: Litecoin also spent much of the week trading mostly sideways, holding a range of about $20. The market bottomed out for less than $120 a few weeks ago, but has since shown some positive signs and is looking to improve its technical chart posture. Like several other cryptos, however, it has still lacked a significant rally that may draw buying attention.
The next few weeks could be key for the crypto space, as investors look to build upon recent gains. There will likely be some key technical tests ahead that the markets must overcome for the rally to continue.Perhaps the biggest test will be the 10k level for Bitcoin. A move above could potentially fuel buying across numerous currencies.