Bitcoin in bullish setup and Bakkt futures OI at an ATH

The BTCUSD daily chart above shows a very bullish setup for the cryptocurrency. When taken with the blast-off in the open interest in Bakkt’s physically-settled Bitcoin futures market, and the continuing surge in volumes of the CME cash-settled futures contract, there is every likelihood of an explosive move higher.

BTCUSD Chart

Here are the bullish points that emerge from the chart.

Saucer bottom formation

A bullish saucer accumulation pattern has emerged between November and end-December. By one definition, it could also qualify as a cup-and-handle pattern. At the handle, note the bullish “Three-White-Soldiers” candlestick pattern.

Trend line breakout

Price has broken above the falling trend line that has existed from June 2019.

Multiple golden crosses

The 20-day and 50-day EMAs have crossed above the 200-day EMA, indicating bullish ‘golden crosses’ in momentum (inside the circle).

These confirmatory factors are painting a bullish picture for BTCUSD.

Open Interest

A report in Cryptoslate has pointed to the build-up of massive open interest in Bakkt BTC futures. On Friday, OI jumped 114% on the previous week to an all-time high of $11.6 million, a situation that is usually indicative of incoming bullishness.

A tweet by Skew says global bitcoin futures open interest is now more than $4 billion, and up 60% since the start of the year.

As of now, the return on BTC for Q1 of 2020 is 29.04% – the best Q1 return in the last seven years, according to Skew.

CME futures volumes

Volumes in CME cash-settled futures have trended sharply higher after January 21. A build-up in volumes together with a build-up in open interest and a run-up in prices together signal bullishness.

Target Price

If BTC/USD breaks above $9,600 there is a clear chance that it can move quickly to $10,500 and thereafter to $11,000.

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