Bitcoin (BTC): Have institutional investors returned to buying after the crash

Credit: Christo Anestev – Pixabay

The technical rebound of Classes of Bitcoin (BTC) post fall of Thursday March 12 continues. The volume increase suggests that it could last.

Key technical factors of the article:

• The bitcoin price has been in technical recovery since the fall of March 12 and the preservation of long-term technical supports. The increase in trading volume confirms the movement.
• Market data on Bitcoin futures and options contracts suggest an early return of institutional traders purchase.

In my two previous posts offered on Cryptaut, I set out my arguments for a long-term opportunity in the wake of the fall of the bitcoin price Thursday March 12.

To summarize, the market had come back violently in contact with very long-term technical supports, the area of ​​$ 4,200 / $ 5,000 and the level of volatility was starting to ebb from historic record levels.

This market view will only be confirmed (or neutralized) over time, in the immediate future it is technical rebound which continues and it started with buyouts of short positions by institutional traders.

Net position of institutional investors in Bitcoin

Above, you can observe the Japanese candles in weekly data from bitcoin price, with a logarithmic scale (y-axis in%) and accompanied by the net open position (futures contracts to buy minus contracts to sell) of hedge fund traders.

After drastically falling in overall value (purchase contracts + sale contracts), the stakeholders being in search of liquidity, the open position increases again and its net balance again tends towards positive territory.

Clearly, the buying positions of institutional have been increasing, via futures and options, for two weeks while short positions continue to decline. This therefore indicates that the support area mentioned seems to interest strong hands, but we must confirm this market data in the coming weeks.

Bitcoin price – source: Tradingview

The second graphic of this article reveals BTC / USD daily trading volume histogram, here excluding future contracts and option contracts. The rise in transaction volume is significant and supports the scenario of a technical rebound towards resistance at $ 7,100 and $ 7,600. Invalidation under the first support at $ 6,200.

Follow Vincent Ganne on Trading View for further analysis on the financial markets. The technical thresholds and the trend indicated above are based on the technical approach "price, momentum, sentiment, ichimoku". The data come from Bitstamp and the graphics of TradingView.

This content is provided for informational purposes only and does not constitute an investment recommendation. We remind you that theinvestment in crypto assets, including Bitcoin, is extremely risky. Cryptocurrency prices are prone to large and unpredictable price swings.