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Bitcoin prices have been volatile in recent weeks, but at the same time they have managed to rise in value. Bitcoin derivatives markets, particularly futures and options, show this week that cryptocurrency traders should expect more swings in the future. Some traders believe that the price of the digital currency could fill two unfulfilled gaps on CME Group’s Bitcoin Futures chart with an upward trajectory towards $ 18,000.
Over the past few days, bitcoin (BTC) has risen above $ 16k in value, as numerous cryptocurrency markets have seen some significant gains this week. On Sunday morning, November 14, 2020, the price of BTC slid below the $ 16k zone to a low of $ 15,750 during the morning (EST) trading sessions.
The asset has regained some of the lost value and continues to battle the $ 16,000 psychological region at the time of publication.
Meanwhile, the bitcoin derivatives markets have seen intense action as both the futures and options markets show signs of things to come. On November 6, 2020, Skew.com tweeted on how the open interest of bitcoin options “exploded big time”.
Needless to say #bitcoin Option open interest is booming pic.twitter.com/kg084toK6u
– skew (@skewdotcom) November 6, 2020
Essentially, open interest is the measurement of contracts that have been initiated within the futures markets held on exchanges such as Deribit and CME Group. From the Skew chart, it shows that BTC options’ open interest is at an all-time high (ATH), with Deribit capturing the lion’s share of open interest.
CME Group, Okex and Ledgerx follow Deribit’s lead and CME’s open interest has grown enormously. In crypto derivatives markets which tend towards bitcoin futures and perpetuals, open interest also hit an ATH this month.
With Bitmex open interest lower than in the recent US survey, most of the foreign exchange interest on derivatives is spread almost evenly with the exception of Bakkt, which is the third lowest exchange in terms of open interest. Deribit is also not in the lead when it comes to the bitcoin futures markets and Okex holds the leading position in this field.
In addition to open interest and trading volumes on the bitcoin futures and options markets, BTC traders are looking at two specific price gaps from CME Group’s Bitcoin Futures chart. The price gaps that have been left blank show targets at $ 17,700 and $ 18,500 and stem from BTC’s parabolic rise three years ago.
Gaps can be left blank either way, and there are some lower regions that have been left blank on CME Group’s Bitcoin Futures chart. For example, on May 16, 2019, BTC prices dropped to $ 6,600 in a snap, thanks to an unmet CME gap at the same level.
Financial markets show that the process of “bridging the gap” can also happen when it comes back to higher BTC prices. Bitcoin could rise to these positions ($ 17,700 – $ 18,500) to fill the gap in the CME chart and consolidate, climb higher, or be pushed back to lower price ranges.
Speculative assets, observed specifically on some CME futures markets, commonly have different variations in price gaps, and BTC is no different. On November 6, 2020, BTC closed the gap represented in the charts recorded on December 21, 2017, from $ 16,455 to $ 16,560. There are also two downside gaps to keep in mind; one at $ 11,095 and another also at $ 11,505, which could be just as likely before the $ 17,700 gap.
What do you think about the recent surge in futures and open interest options and the CME bitcoin futures gaps that could fill the $ 18k price range? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Skew.com,
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