Journalist
Posted:
- One of the largest banks in the world just gave a nod to Bitcoin by launching crypto custody services.
- Bitcoin’s latest bullish divergence may be due to rising open interest on derivatives and rising demand for whales.
Bitcoin’s next big rally could be spectacular and this is not being concluded because of past performance. Where there’s smoke, there’s fire and there are plenty of signs that momentum is starting to build.
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Deutsche Bank, one of the largest financial institutions in the world, has reportedly launched crypto custody services. This is the latest development pointing to the changing tide of Bitcoin. So why is it so important?
Megabank, Deutsche Bank (1.4 trillion), now offers Bitcoin and crypto custody services.
The pieces come together.
— Lark Davis (@TheCryptoLark) September 14, 2023
Well, not so long ago, the banking and traditional finance industries saw Bitcoin as a threat and opposed it. The announcement represents the change that has taken place in recent months and, more importantly, banks are changing their minds about Bitcoin.
The development adds to the list of Bitcoin-centric outcomes that have aligned in favor of a bullish outcome. The fact that a major global bank is venturing into Bitcoin custody suggests that there is a growing demand for cryptocurrencies from their customers. The list certainly includes institutional clients.
Increased banking confidence, coupled with greater institutional involvement, could fuel a bigger rally than the previous bull run. While the development highlights the long-term prospects, there are signs that the short-term situation is about to change.
Bitcoin’s price action reveals a bullish divergence
BTC’s price action showed that the price has fallen to lower lows, while the Relative Strength Index (RSI) has higher lows. Such divergence is often observed when a pivot is formed. Could this development validate the extension of Bitcoin’s rally that started on September 12?
Source: TradingView
We previously saw a death cross on Bitcoin’s price chart, but the price rose instead of increasing its negative side. However, the death cross is a lagging indicator because it emphasizes what has already happened.
But it is entirely possible that the whales are manipulating the market by trading against expectations. In that case, the difference may not be a very reliable sign that Bitcoin will continue its current rally.
How much is 1,10,100 BTCs worth today?
More downsides are still possible, especially as market volatility returns. This was evident from the recent revival of demand in the options and futures segment. Both futures and options open interest recorded a spike in demand over the past five days.
Source: Glassnode
Higher volatility could lead to more whale activity. So it’s worth noting that whales also bought whales. However, there is still some uncertainty about the US Federal Reserve’s next interest rate decision. Higher rates would likely interrupt the current rally.