Bitcoin [BTC] Price Enroute 6th Positive Weekly Close, Will CME Expiry Begin Reversal?

bitcoin-bullish-fractals

Bitcoin [BTC] price gained 4.93% on a daily scale, as the price touched a high at $7,775. The volatility is expected to continue today as well with the futures and options expiry at CME. 

Bitcoin [BTC] price inks 100% recovery from the drastic crash in March last month at $3850. The strong bullish candle causes massive liquidations (nearly $75 million), as the sentiments are shifting towards positive.

btc futures cme price
BTC Futures Price on CME (TradingView)

Bitcoin [BTC] has had a strong recovery to its price from March lows and is currently looking to log six consecutive positive weekly candles. Crypto derivatives trader, Jo, tweeted,

Now it looks like $BTC is trying to close a 6th green week in a row.

It’s also important to note that CME expiry tomorrow *could* involve a change of trend. When Bitcoin decides to end its weekly positive streak, I want to be on the right side.

An End to Positive Rally?

 

Data analytics website Skew tweeted on the 27k bitcoin options are expiring today. Now, since these are European style options, the settlement at expiry is imminent at closing time.

Moreover, the ratio of put of call options Open Interest and volume has been in the range of 0.4-0.6. Hence, the settlement of call options is more likely to cause a drop.

cme bitcoin futures
CME Bitcoin Futures Volume and Open Interest (Source)

 

The markets have returned to a contango with futures prices of CME contracts trading higher for coming months. Moreover, the BitMEX funding rates have turned positive as well. These are signs which favour the bears at the moment.

At the expiration of derivatives contract in the previous month we saw a dip in prices, which could be a signal of long orders/ call options taking profits.

Currently, a huge gap from the previous month is left unfilled up to $9125, which is bullish. Moreover, as we head close to the weekend, the closing today will be instrumental in either continuation of a bullish trend or a fake-out before bearish reversal.

Do you think the rally will continue or we correction is due? Please share your views with us.