Article By Jim Preissler
The weekend rally has seen a pullback but not of the magnitude of several weeks ago and Monday’s price action was limited to consolidation at current levels. And so Tuesday would follow a similar pattern with Bitcoin (BTC) sitting at $3,970 and Ethereum (ETH) at $137.50.
Price action during the day is limited as BTC continues to flirt with $4,000 once more and ETH adds a few cents on the day. Looking through Monday’s headlines, one, in particular, stands out. The CBOE, the first exchange to list Bitcoin futures, has decided to end the product when the last currently traded contracts expire in June. They cite decreased demand for the offering but are not completely closing the door on crypto. Given one of the prerequisites for ETF approval from the SEC would appear to be a robust futures market, we are a little surprised that there was not more of a reaction to this. The lessening demand for the product is probably most concerning.
However, the CBOE volume is only about 25% of that of the CME and we also expect the Bakkt exchange to launch later this year. For now, the markets need a little more to get them going.
With minimal movement at familiar levels it’s always a challenge to come up with something new to look at – sometimes you just have to reinforce an old concept. BTC’s dominance is still over 50%, so it is still most likely to lead the way if there is to be an extensive move in either direction from current levels. To the topside, we need to hurdle February’s short-lived high around $4,250. Above there we have further resistance at $4,400 and $4,750 with an ultimate hurdle of that former line in the sand at $5,800. To the downside, initial support is at the bottom of the horizontal channel around $3,330 and then again at December’s low of $3,120. Also, don’t forget that 200 Week Moving Average that now comes in around $3,410. Anywhere in the middle is just noise and consolidation.