Bitcoin Reclaims Crucial Level, Bulls Poised For Charging Bull Run | Insights from BTC CME Futures and Bollinger Bands
In a significant development, the price action of Bitcoin CME Futures BTC1 front month continuous contract concluded over the weekend, marking the end of the trading week on Friday evening. Notably, the closing price on Friday showcased a recovery above a critical level, historically associated with a surge in bullish momentum in the cryptocurrency market. In this article, we delve deeper into the factors indicating that the bulls might be gearing up for a potential surge in the upcoming weeks.
Insights From BTC CME Futures: A Valuable Tool For Institutional Traders
When it comes to trading Bitcoin, large institutional traders prefer to venture beyond spot BTCUSD trading and popular cryptocurrency platforms like Binance and ByBit. Instead, they direct their attention to the Chicago Mercantile Exchange, renowned as CME Group, to engage in speculation and trading via derivatives contracts.
Distinguishing itself from the constantly active cryptocurrency market, CME Group charts follow a schedule akin to traditional stocks, closing down during weekends and holidays. This behavior results in the presence of gaps within the charts, absent in standard BTCUSD price charts. Such disparities between BTC CME Futures charts and BTCUSD charts can potentially lead to deceptive price movements, commonly referred to as “fakeouts” and “shakeouts.”
Due to the weekend shutdown of Bitcoin CME Futures, the charts can serve as a precursor, offering early indications of how spot price charts might conclude on Sunday nights. In the present scenario, BTC Futures has successfully reclaimed the Bollinger Band basis line, often denoted as the “mid-BB.” This development holds the potential to shape future market trends.
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Bitcoin Rebounds Above Bollinger Band Basis Line: Potential Support For A Bullish Rally
The Bollinger Bands, a popular technical analysis tool created by John Bollinger, incorporate a basis line that represents a 20-period simple moving average (SMA). To further enhance the tool’s effectiveness, Bollinger adds upper and lower bands positioned at two standard deviations of the SMA. This configuration allows the bands to dynamically expand and contract in response to market volatility.
Similar to other moving averages, the basis line can play a pivotal role in determining levels of support and resistance. It has the ability to provide a supportive foundation for price action or impede further upward movement. In the aftermath of the most recent weekly close of BTC Futures, Bitcoin has managed to surpass the mid-BB (Bollinger Band basis line), potentially solidifying it as a level of support.
Examining the upper portion of the chart, Bitcoin showcases a notable upward trend following its ability to remain above the basis line in 2019 and 2020. The lower portion provides a closer analysis of the most recent weekly close. Barring any significant downturn prior to Sunday night, it is expected that BTCUSD technicals will align accordingly. Considering historical patterns, this recovery could potentially trigger a bullish rally.