Bitcoin price stalled today after a significant 10% rally yesterday. There was no major news behind the rally but we believe it was mostly because investors are still counting days to halving, which will happen in the coming month.
Another reason for the gain yesterday was that more institutional investors continued to move to Bitcoin. This was revealed by Skew, a company that provides data analytics services. In its report, the company said that open interest for Bitcoin futures listed on the CME Group had recovered after falling in May.
On Wednesday, open interest stood at more than $181 million, which was a whopping 70% increase from March 22. In its report, Skew said that the rising open interest was a sign that some Wall Street firms wanted some exposure in crypto. This is usually a positive sign especially in a relatively young industry like Bitcoin. In addition, institutional investors are probably being optimistic that Bitcoin’s price will continue to rise after the Fed started to print money in form of quantitative easing.
The pause in Bitcoin’s price today is probably because some bulls are taking profit. It is also probably because of rotation as most investors rush back to stocks after the positive news about a cure for coronavirus.
Institutional investors are not the only ones buying Bitcoin. According to Coindesk, open interest on other platforms like Bakt, Kraken, and Huobi rose to more than $2.3 billion on March 15 from $1.7 billion on March 13. These exchanges are usually popular with retail traders.
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Bitcoin Technical Outlook
Looking at the daily BTCUSD chart, we see that the price has found some resistance at the 50-day exponential moving average. Also, it is visible that Bitcoin price has been consolidating by forming a symmetrical triangle pattern. This pattern is nearing its tip at the 50% Fibonacci Retracement level. This Fibonacci connects the highest and lowest level this year.
Therefore, I expect the pair to continue rising, and first test the important resistance level of 7,400. I also expect the momentum will continue if it manages to break above the 50% retracement level.
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