Bitcoin CME Futures BTC1 front month continuous contract price action closes over the weekend, making Friday evening the closing bell for the week. This Friday’s close saw price recover above a crucial level that in the past led to a bullish impulse in crypto. Here is a closer look at why bulls could be ready to charge in the coming weeks.

Using BTC CME Futures As A Crypto Crystal Ball

Large institutional traders don’t just trade spot BTCUSD, nor do they trade on Binance, ByBit, or another crypto platform. When they want to speculate and trade using derivatives contracts, they look to the Chicago Mercantile Exchange, better known as CME Group.

Unlike the 24/7, always-on crypto market, CME Group charts close down for the weekend and holidays much like stocks. Due to this behavior, the chart often features gaps that don’t appear on standard BTCUSD price charts. Discrepancies between BTC CME Futures charts and BTCUSD charts can lead to fakeouts and shakeouts.

Because Bitcoin CME Futures does stop on Friday for the weekend, it also can provide early clues as to how spot price charts might close on Sunday night. In this case, BTC Futures has reclaimed the Bollinger Band basis line, often referred to as the “mid-BB”.

Is the third time the charm? | BTCUSD on TradingView.com

Bitcoin Price Recovers Above The Bollinger Band Basis Line

The basis line on the Bollinger Bands is a 20-period simple moving average. The tool’s creator, John Bollinger, then adds an upper and lower band set at two standard deviations of the SMA. This causes the bands to expand and contract with market volatility.

Like any moving average, it can act as dynamic support and resistance, holding up price action or preventing it from pushing along further. Following this Friday’s BTC Futures weekly close, Bitcoin has made it back above the mid-BB, possibly confirming it as support.

In the upper portion of the chart above, Bitcoin goes on an impulsive uptrend after holding above the basis line in 2019 and 2020. The lower portion depicts a closer look at this latest weekly close. Unless there is a massive collapse before Sunday night, BTCUSD technicals should follow suit. And if history repeats, a bull run could follow.

Is Bitcoin ready for a strong rally higher after reclaiming the key level as support? This chart was featured in issue #8 of CoinChartist (VIP) alongside a dozen other exclusive crypto charts. Click here to learn more.

Amid the ongoing crypto regulatory uncertainty, Bitcoin’s market dominance has surged to its highest level since July 2021, suggesting a shift in the sentiments of traders and investors towards the world’s pioneer and most substantial cryptocurrency, Bitcoin.

This milestone highlights the current volatility of the crypto market as it continues to grapple with regulatory uncertainty and the various factors that impact Bitcoin’s value.

The Resurgence Of Bitcoin Dominance

The latest data from TradingView reveals that Bitcoin dominance, defined as Bitcoin’s share of the total cryptocurrency market capitalization, has hit a high of 49.5%. This level has not been recorded since July 2021 when Bitcoin’s dominance touched a peak of over 48%.

It is worth noting that earlier this year in April, Bitcoin’s dominance momentarily reached 48.83%, after which it fluctuated within a specific range.

However, the past week saw a notable increase in Bitcoin’s market dominance, correlating with the time when the US Securities and Exchange Commission (SEC) categorized numerous tokens as unregistered securities in its lawsuits against the world’s largest crypto exchanges – Binance and Coinbase.

Consequently, many of these tokens such as Cardano (ADA), Solana (SOL), and Binance Coin (BNB) have experienced significant price drops, while Bitcoin’s value has remained comparatively stable.

Market Influences And The Upcoming BTC Halving

The regulatory actions by the SEC underscore an environment of uncertainty that has had noticeable effects on the crypto market. Amid this backdrop, Bitcoin emerges as a sort of safe haven.

Micheal Saylor, a prominent Bitcoin advocate, echoed these sentiments in a recent interview with Bloomberg, predicting that: “the entire industry is kind of destined to be rationalized down to Bitcoin and a half a dozen to a dozen other proof-of-work tokens.”

Furthermore, anticipation around the upcoming Bitcoin halving event, slated for April or May 2024, could be a contributing factor to Bitcoin’s increasing dominance.

This quadrennial event reduces the reward for mining new Bitcoin blocks by half, effectively slowing the rate at which new Bitcoins are created to manage inflation and maintain their scarcity. The impending halving will result in a block reward decrease from 6.25 bitcoins to 3.125 bitcoins.

Notably, BTC has been in a downward trend in the past week. The largest crypto asset by market capitalization has recorded a bearish movement falling by nearly 5% in the past 7 days. However, over the past 24 hours, BTC has picked up an uptrend, seeing a 2.3% gain in its value.

Bitcoin currently has a market price of $25,515, at the time of writing after initially trading below that price range earlier this week. Meanwhile, Bitcoin’s trading volume has plunged over the past 24 hours from over $15 billion on Thursday to $7.7 billion at the time of writing indicating less trading activity.

Featured image from Unsplash, Chart from TradingView

The application by BlackRock, the world’s largest asset manager, for approval of a Bitcoin spot ETF with the US Securities and Exchange Commission (SEC) is the biggest story in the crypto market today. Numerous experts are extremely optimistic that an approval of the first Bitcoin spot ETF in the US will be a massively bullish event, attracting huge amounts of new capital and triggering a new bull run.

But where does this theory come from? Bitcoin is often referred to as the digital gold of the 21st century, so it’s an obvious choice to look at the history of gold and the first gold based spot ETF.

Why The BlackRock Bitcoin ETF Would Be So Bullish

The first thing to note is that BlackRock applied for a spot ETF and not a Futures ETF. The SEC has already approved a number of Bitcoin Futures ETFs that hold Bitcoin futures contracts on the CME. These are currently traded on the US equity markets, but have relatively low popularity. And this has its reasons, first and foremost the so-called “drag”, as Scimitar Capital explains.

Drag refers to the underperformance of a fund that attempts to replicate the return of a particular underlying asset and is a long-term result of regular portfolio rebalancing. To track the spot price, BITO, the largest bitcoin futures ETF, holds 2/3 in the front-month future and 1/3 in the following month.

However, this “rolling” is costly because of transaction fees, slippage and because futures for the last month are usually traded at a premium over the first month in BTC (“contango”). For this reason, futures ETFs are not a good investment for retail traders in the long run and are therefore unpopular.

A Bitcoin spot ETF does not have these disadvantages. “This is the reason why physically backed ETFs like GLD and IAU for gold have a combined 90B of AUM whereas futures backed ones like BITO and USO have a paltry 1.6B,” Scimitar Capital says.

The first gold ETF, the SPDR Gold Trust ETF (GLD), was listed on the NYSE on November 15, 2004 and revolutionized gold trading. Before GLD came on the market, it was possible to invest in gold in the form of bars, coins, certificates and shares of gold mining companies.

The exchange-traded fund made investing in precious metals a no-brainer and eliminated the problems of shipping and vaults. The same revolution could be coming to Bitcoin by a Bitcoin spot ETF. Retail investors could hold Bitcoin long-term through the ETF without worrying about custody and private keys.

And the revolution in gold also made itself felt in the price. While the price of gold was still below $450 per ounce in November 2004, gold saw a meteoric rise in the years that followed.

In September 2011, less than seven years after the launch, gold was trading at $1920 per ounce. Many economic factors have influenced the price of gold, but the launch of ETFs certainly played an influential role in attracting global institutional funds to the market.

The digital gold of the 21st century, Bitcoin, may yet see this price explosion if history repeats itself.

At press time, BTC traded at $25,604, reclaiming the 200-day EMA (blue line).

Featured image from iStock, chart from TradingView.com