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Bitcoin Price Jumps 9%, Most Since Early March
Bias for short-term bitcoin puts or bearish bets has weakened in the wake of price rise.
Bitcoin surged 9.7%, its biggest percentage rise since March 1, rebounding from a seven-week low reached a day earlier and reestablishing a foothold above $50,000.
STORY CONTINUES BELOW
The price increase came amid continuing signs of growing adoption of cryptocurrencies. Hours after the bitcoin price started rising early Monday, CoinDesk reported that investment banking giant JPMorgan could soon launch a bitcoin fund for its deep-pocketed clients.
The top cryptocurrency was changing hands at $53,860, per CoinDesk 20 data.
The ascent began early in Asia trading hours when the cryptocurrency reached lows near $48,000 and looked oversold as per the relative strength index – an indicator widely used by traders to assess the price momentum.
JPMorgan could launch an actively managed bitcoin fund for private wealth clients as early as this summer, sources told CoinDesk. The investment bank has yet to confirm its plans to launch a fund dedicated to the top cryptocurrency, which seen a sixfold rally since October 2020.
JPMorgan's bitcoin fund could accelerate institutional adoption. Rivals Morgan Stanley and Goldman Sachs have already announced plans to offer bitcoin exposure to their wealthy clients.
While the cryptocurrency is gaining ground for the first time in six days, the options market continues to show bias for short-term puts, or bearish bets, with the one-week "put-call" skew above zero.
Put-call skews measure the cost of puts relative to that of calls, and they’re seen as a gauge of the market’s bias. However, the metric has come off sharply to 6% from highs above 20% seen last week, an indication of reduced bearishness. According to some analysts, it’s a sign the market has bottomed out.
With #BTC back over $50k, 7d put-call skew coming down from last week's elevated levels.
— Laevitas (@laevitas1) April 25, 2021
In the last 24h we also saw some unwinding of 30APR21-50000-P, OI is down by 17%.
Perhaps the pain is over for now.#OptionsTrading pic.twitter.com/fyWVVeIVCN
Market chatter shows some investors are skeptical about the sustainability of the price bounce, as the weekly chart MACD histogram, an indicator used to gauge trend strength and trend changes, has crossed below zero, in a sign of a bearish shift in the market sentiment.
Seven of the past ten bear crosses on the weekly MACD histogram led to deeper price declines. As such, the latest developments on the MACD are a cause for concern for the bulls.
The larger issue, is now that we’ve bounced, can $BTC break through overhead resistance around $57K? Remember, we still have a weekly bearish cross on the MACD, & those are HTF signals. We have to see if this is an oversold bounce, or something more significant. Time will tell 👇 https://t.co/Q3XAN33ZQ2
— JT ✝️ (@JTheretohelp1) April 26, 2021
Also read: Polygon Jumps in Crypto Market Rebound, as Ether Congestion Drives Adoption for Rivals
Omkar Godbole
Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.
