Bitcoin Eyes Another Attempt at $9,500 Following Largest One-day Volume for CBOE Futures
The price of bitcoin (BTC) briefly dropped below $9,000 on April 25 but regained the critical level on April 26. On April 27, BTC-USD reached a high of $9,387.82 on the Bitstamp exchange, rebounding from lows near $8,600 on April 26 after the CBOE experienced the largest daily volume for bitcoin futures.
Two ‘Record Sessions’ into Bullish Run, Five to Seven More to Go
The weekly chart below shows we are currently in a bullish ‘record session’ count, with two consecutive highs over the past fortnight. Notice, that after making a low at $6,427.16 during the week of March 26, no new low was made in the following three weeks. Therefore, we start the count from the week of April 16, since the price action broke above the $8,500 level (high of March 26) during this period.
Since we have two record session highs, we anticipate that the bullish run will continue for another five to nine weeks at least.
Remember, using the ‘record session’ method, a market is suggested to be overstretched when we observe seven to 11 near consecutive higher highs (or lower lows).
The earliest we can expect a peak if the bullish move continue is during the week of May 28. The latest would be October 29. However, if no new high is made for three weeks and BTC-USD remains below $9,755.53 until May 21, the count will be invalidated.
Volume on the Bitstamp exchange has been increasing over the past four weeks, supporting the upward move.
A Move Toward $11,000 Expected
Looking at the daily chart we see that the path of bitcoin was somewhat in line with our expectations as per BTCManager’s previous price analysis. The market broke above the Ichimoku cloud on April 24 but did not manage to stay above the $9527.70 resistance for too long, peaking at $9755.53.
The chart shows the conversion line (blue) has held as support and the market has closed back above the Ichimoku cloud, giving a bullish outlook. We also see that the cloud is changing color from red to green, giving an indication to go long in the immediate or next few sessions.
When looking at the Renko charts, we see that another green candle has formed, closing above the base line, which suggests that over the long term, BTC-USD should move toward the Ichimoku cloud area, and return to equilibrium. The lower span of the cloud lies near $11,000 for early May.
A daily close below $8433.12 would reverse the upward trend according to the Renko chart and motivate a short position.
4-hour Charts Shows Sign of Reversal
The 4-hour Renko chart shows an imminent, potential buy signal. After painting two red Renko candlesticks, it looks as if BTC-USD will deliver a reversal signal by painting the first green Renko after a series of red ones.
A 4-hour session close is required above $9387.76 to paint the green Renko and indicate a change in trend on this timeframe. Once the green Renko is complete, we should see a move toward the $10,000 psychological level, since the market has broken out of and tested support provided by the Ichimoku cloud on the candlestick chart, as laid out in our previous price analysis.
CBOE Bitcoin Futures See Highest Ever Daily Volume
April 25 marked the highest ever volume for bitcoin futures on the CBOE. The futures contracts began trading in December 2017, when bitcoin was near $20,000. The previous high-volume session was January 17, 2018, when just under 15,500 contracts.
In contrast, the May futures traded 18,210 contracts in recent days while of across all term structures, 19,000 bitcoin futures traded on the exchange on April 25.
In an April 26 video posted by the CBOE on Twitter, Options Institute senior instructor Kevin Davitt stated:
“The average daily volume (ADV) runs about 6,600 in XBT Bitcoin Futures. Yesterday’s volume was nearly three times ADV. Yesterday was the highest daily volume for bitcoin futures since their introduction here at CBOE nearly five months ago.”
The data may be indicative of greater institutional interest in the leading cryptocurrency.