While traditional markets started the new month with a sell-off, bitcoin is holding its own.
Bitcoin (BTC) was trading up 1.2% over 24 hours at $8,728, with 10-day and 50-day technical indicator moving averages continuing to signal sideways sentiment Friday. A slight price rally to $9,000 took place at around 12:00 UTC (9 a.m. EDT), though it later pulled back to $8,700 territory at press time.
The first trading day in May saw Japan’s Nikkei 225 index closing in the red 2.8%. Exports from South Korea dropped 24% in the first quarter, a tough blow for a region that relies on them. European markets were closed for a holiday Friday.
The S&P 500 index was down 2.8% Friday as dismal manufacturing and real estate data dragged on markets. Earnings for major companies in the tech sector were disappointing, taking a toll on the U.S. equity benchmark. More than ever before, the S&P 500 index is influenced by just a handful of tech stocks, with five companies now constituting more than 20% of its composition.
However, the traditional futures market has captivated those experienced traders looking to bet on the future price of bitcoin.
“What's demanding our mind space is that, whereas on BitMEX we've seen a fall in open interest, we've seen it stabilize on the CME and Bakkt amid higher volume the last two days,” said Vishal Shah, a crypto options traders and founder of derivatives exchange Alpha5.
”That's a silver lining around positioning,” he added. Indeed, open interest, or contracts outstanding, on crypto derivatives exchange BitMEX has trended lower.
Open interest on the Chicago Mercantile Exchange (CME) bitcoin futures market is up along with higher volume. The CME is a stalwart for futures trading, including bitcoin, for well-capitalized, experienced commodities traders. Brokerages usually require a $250,000 minimum deposit to maintain an active account there.
Some uncertainty ahead of bitcoin’s expected May 12 halving event might have professional traders more focused on futures rather than the spot market, according to Sweden-based over-the-counter crypto trader Henrik Kugelberg.
“Bitcoin tends to move in the opposite direction of what the broad layers expect, so the days around the halving might turn into a bloodbath,” Kugelberg said. “I have a distinct feeling a whale or two will suck the satoshis out of people wanting to catch the halving run,” he added.
Regardless of the trading venue, there are investment strategies aplenty ahead of bitcoin’s reward halving from 12.5 down to 6.25 BTC. “The arbitrage opportunities will be very vibrant,” said Constantin Kogan, partner at cryptocurrency fund BitBull Capital.
Digital assets on CoinDesk’s big board performed well Friday, with most in the green. The second-largest coin by market cap, ether (ETH), lost 1.4% in 24 hour trading as of 20:00 UTC (4:00 p.m. EDT).
Oil experienced another price gain, up 3.3% as of 20:00 UTC (4:30 p.m. EDT) even as supplies remain high and demand continues to be weak. “U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by nine million barrels from the previous week,” said Nemo Qin, analyst at multi-asset brokerage eToro. “U.S. crude oil inventories are about 10% above the five-year average for this time of year.”
Meanwhile, gold traded up less than 1 percent and closed the New York trading session at $1,698. The yellow metal traded down as much as $1,668, a low not seen since April 20.
U.S. Treasury bonds were mixed on the day. Yields, which move in the opposite direction as price, were were down on the 30-year, coming in red at 1.3%.