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Bitcoin Reacts Positively To Introduction Of BTC Futures; Can It Reach $20k Soon?

Published 13/12/2017, 11:29 am
Updated 06/07/2021, 05:05 pm

Originally published by AxiTrader

(Bitcoin) has been consolidating in the past 12 trading hours, although without showing any signs of weakness. The introduction of BTC futures had an overall positive effect on the cryptocurrency. Concerns that only short sellers will be interested in the futures proved to be unnecessary. Why would they? For most miners (except the big ones), the futures are not a very attractive hedging tool due to the high margin requirements. On the other side, hedge funds and similar speculators are unlikely to be willing to fight such a strong trend at this point.

The futures contract helped to reduce volatility a bit and the price difference between the crypto exchanges have decreased. This is a positive development, and more stability should help to attract more institutional investors to enter the Bitcoin market. Nevertheless, Bitcoin remains a highly volatile market and flash crashes should be expected at any time.

The charts signal further gains in the near-term. The cryptocurrency is likely to reach the major resistance level at $20,000 by the end of the year. There, Bitcoin is likely to struggle initially, amid profit-taking.

Arguments of whether Bitcoin is a bubble are very much in the eye of the beholder. Increasingly central bankers and regulators are sounding warnings.

But, for the moment Bitcoin (BitfinexUSD) retains a solid, if less volatile, bid with Bitcoin booster and hedge fund manager Mike Novogratz saying this week "we are in a speculative mania and my sense is we are still fairly early" adding "the market trades like it wants to go up, not down".

Overnight early adopter, and former Facebook (NASDAQ:FB) executive, Chamath Palihapitiya told CNBC that the Bitcoin price could go to $1 million.

So there remains plenty of hype around the price which suggests the rally in Bitcoin could continue for a while. It is especially the fear of missing out effect that is keeping prices high. Investors who are afraid of missing out on the next big rally are happy to buy every larger dip or major breakout to the topside.

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