16 June 2020

BTCUSD longs daily chart

How the US Federal Reserve decisions help bitcoin, BTC options contracts demand increases 10x, ETH breached a 3-months pattern and what happen to the price next

BTC/USD daily chart

16 june btcusd daily

Yesterday bitcoin price shortly broke out of the triangle pattern to the downside losing 5%. However, bulls quickly stepped in and drove the price back up above the support line. Once again BTC is facing the resistance of the 20-day moving average on the way to retest the upper side of the triangle. Relative Strength Index demonstrates a bearish divergence on a daily chart and MACD indicator agrees with a bearish sentiment on the market. So, the next attempt of bears to take control might result in at least a 7% decline in price, down to the next support of the 100-day moving average.

Fed reserve helped BTC

Some analysts believe that the decision of the US Federal Reserve to buy individual corporate bonds was the reason behind bitcoin’s price recovery from that dip. Yesterday they announced the intention to increase their spending and purchase secondary bonds in order to reduce corporate debt. American treasury allocated $750 million for the economy and major corporations to stay afloat.

CME Bitcoin options skyrocketing

16 june cme

In the meanwhile, the demand for CME bitcoin options increased 10 times in the last month. The interest in contracts rose to $373 million, a record high. CME Group, one of the world's largest financial derivatives exchanges, took over 20% of the BTC options market. It is important to note that $930 million worth of bitcoin options from both CME and Deribit will expire next Friday on June 26th and around this time volatility tends to pick up.

ETH/USD daily chart

16 june ethusd daily

Bollinger bands form a tightening corridor for ETH as it is experiencing low volatility within a narrow range of an upwards trending channel. Despite the steady growth for the past three months Lucid SAR is looking rather bearish. Yesterday’s breach outside of the corridor to the downside got supported by a 50-day moving average. However, in case of a decisive bearish move we might see a $205 price for ether. In an alternative scenario, breaking above the 20-day moving average could be a signal that ETH will reach the resistance level in $270-280 territory and maintain the pattern.

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