Spiking CME Bitcoin Futures Open Interest Could Signal Breakout Is Finally Near
Bitcoin futures open interest on the Chicago Merchantile Exchange suddenly surging 16% could be a signal that the recent boredom may finally break.
After nearly three full months of sideways trading and record-low volatility, does this subset of traders have insight into a big breakout coming? Or could these traders potentially be jumping the gun yet again?
Bitcoin BTCUSD Daily Bollinger Bands | Source: TradingView
Bitcoin Price Finally Makes A Move, But Will The Range Break?
BTCUSD is trading at $9,350 after one of the largest intraday moves in recent weeks. Yesterday’s early morning surge may have been the start of the breakout that traders have been waiting for.
The pump coinciding with stocks surging and gold setting new local highs, sent crypto assets soaring higher. Bitcoin broke through a short-term downtrend line and symmetrical triangle, but the reaction has been meager thus far considering the consolidation.
Related Reading | Why Data Could Suggest Bitcoin Boredom Will Last Another Three Months
Bitcoin price has been trading sideways for almost 90 days now, and while data shows that another 90 days is still possible, analysts are clamoring for an explosive move.
Bollinger Bands are at the tightest point since the last over 50% move in Bitcoin that took the asset to its bear market bottom. After such coiling, yesterday’s move in BTC resulted in a push through the middle-line in the Bollinger Bands and a first lift in the outer bands.
It also pushed the asset’s price to the top of the bands, prompting the indicator’s creator to warn of a “head fake.”
— skew (@skewdotcom) July 22, 2020
Early Signs Of Life Lead To 16% Climb In CME Futures Open Interest
This latest move also caused a massive surge in open interest on Bitcoin futures trading platform known as CME.
The platform primarily serves high-wealth individuals, institutional investors, and more. Due to this, the platform often can dictate major movements in the crypto market. For this reason, analysts pay close attention to things like open interest on the platform, or where gaps are left behind when trading sessions close for the weekend.
After yesterday’s move in BTCUSD, CME open interest grew by 16% according to Skew data.
Open interest on the platform has been in a downtrend since late May and early June, before the sideways action took hold. This rise may see open interest break out from the downtrend along with the breakout in the downtrend resistance line.
Now that the Bollinger Bands are beginning to lift, and CME open interest is rising again, the explosive move analysts have been waiting for may finally be here.
Data had shown that the sideways range could continue for another three months, but more signals are pointing to the breakout happening sooner than later.