Bitcoin has once again smashed expectations.
The largest cryptocurrency by total value hit record highs on CoinDesk's Bitcoin Price Index (BPI) this morning, with prices reaching $6,600 at 11:00 UTC. At the time of writing, the bitcoin-U.S. dollar (BTC/USD) exchange rate has dropped somewhat to $6,498, but that said, BTC is up 3.76 percent in the last 24 hours.
The move follows the news U.S.-based derivatives marketplace operator CME Group plans to offer bitcoin futures later this year, a notable announcement as it perhaps opens new doors for the world's yield-hungry institutional investors.
The hunt for return has intensified over the last couple of years, courtesy of record low interest rates across the developed world. So, if it comes to fruition, which largely depends upon U.S. regulators, CME's decision could end up creating a rival for equities.
As cited by Bloomberg, the listing on the CME offers the following benefits: firstly, liquidity could increase with high-frequency traders acting as market makers, and, secondly, traders would be able to hedge cash positions in the digital money
So far, the numbers speak for themselves: bitcoin is up more than 500 percent on a year-to-date basis, and price action analysis suggests a potential for a rally above $7,000.
The above chart shows:
- Rally ran out of steam at the rising channel ceiling (upper end of the rising channel).
- The daily relative strength index is overbought, but still well below the highs seen mid-October.
- On the higher side, $7,076 (127.2% Fibonacci extension) is the level to watch out for.
- A break above the rising channel ceiling would open doors for $7,000 (psychological resistance) and $7,076 (127.2% Fibonacci extension).
- A technical correction is always a possibility after a rally of such epic proportions.
- Only an end-of-day close below the rising channel support (seen today at $5,690) would signal a short-term bullish-to-bearish trend change.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.