Bitcoin’s recent rally has sparked a massive influx of activity from large retail and institutional futures traders
This heightened trading activity comes as the crypto reaches a “make or break” price level that could determine how it trends in the weeks and months ahead
Bitcoin incurred a notable uptrend yesterday morning that allowed it to climb from lows of $7,100 to highs of $7,800 before it met some resistance and declined back down to its current price of roughly $7,500.
This bull-favoring price action came close on the heels of an extend period of consolidation between $6,800 and $7,200, and the bullish break out of this tight trading range has led many investors to grow increasingly bullish.
It now appears that institutional traders are taking note, as data regarding CME Bitcoin futures volume shows that it just reached a one-month high yesterday.
Bitcoin Reaches a Turning Point Following Recent Rally
This recent volatility has led Bitcoin up to what appears to be a critical pivoting point for the benchmark cryptocurrency.
Throughout 2019 and 2020, $7,500 has been an important level that has determined multiple notable trends for BTC.
Because of this, one analyst on Twitter recently noted that whether or not BTC can firmly surmount this level in the days ahead will offer significant insights into which direction it will trend next.
“Since 2019 a level of upmost importance has been 75xx – Above it: trend has been very bullish. Below it: trend has been very bearish (provided great entries) – Currently testing waters above it, confirming it support would be exciting to say the least,” he said.
Image Courtesy of Teddy
It does appear to be a possibility that the crypto is currently attempting to establish support at this critical price level.
Institutional Traders Taking Note of This Price Action’s Importance
According to recent data from Skew, CME Bitcoin futures volume and open interest ballooned to a one-month high yesterday.
“CME bitcoin futures volume & open interest reached a one month high yesterday ~1500 contracts were rolled from April to May, ~1200 contracts remain open for expiry later today,” they noted.
Image Courtesy of Skew
Because CME futures have high minimum trading requirements, they tend to primarily attract institutions and large retail traders.
This spike in trading volume seems to suggest that these traders comprehend the importance of Bitcoin’s recent price action, and may also signal that they believe that this rally will help BTC establish a clearer trend.
Featured image from Unsplash.