Bitcoin CME Futures BTC1 front month ongoing contract price action closes over the weekend, making Friday night the closing bell of the week. At this Friday’s close, the price recovered above a crucial level that has historically led to bullish momentum in crypto. Here’s a closer look at why bulls may be ready to attack in the coming weeks.
Using BTC CME Futures as a crypto crystal ball
Major institutional traders do not only trade BTCUSD, nor do they trade on Binance, ByBit, or any other crypto platform. If they want to speculate and trade with derivative 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 for weekends and holidays, just like stocks. Because of this behavior, the chart often contains gaps that are not found on standard BTCUSD price charts. Differences between BTC CME Futures charts and BTCUSD charts can lead to fakeouts and shakeouts.
As Bitcoin CME Futures closes for the weekend on Friday, it can also provide early Clues about how spot price charts might close on Sunday night. In this case, BTC Futures has reclaimed the Bollinger Band baseline, often referred to as the “mid-BB”.
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Bitcoin price recovers above the Bollinger Band baseline
The baseline on the Bollinger bands is a simple 20-period moving average. The creator of the tool, John Bollinger, then adds an upper and lower band set to 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 back price action or preventing it from moving forward. After Friday’s weekly close of BTC Futures, Bitcoin has moved back above the mid-BB, possibly confirming support.
In the upper part of the chart above, Bitcoin is on an impulsive uptrend after staying above its baseline throughout 2019 and 2020. The lower section provides a closer look at this latest weekly close. Unless there is a massive collapse before Sunday evening, BTCUSD technicians should follow suit. And if history repeats itself, a bull run could follow.
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