Bitcoin futures offered on the Chicago Mercantile Exchange (CME) and its competitor Bakkt rallied as BTC surpassed $7,000, a price not seen since March 11 just before it recorded its biggest drop of the year falling below $3,800.
By March, many of the companies that offered futures contracts, — where parties are obligated to buy or sell a certain amount of assets on a specific date, with a price agreed upon at the time of negotiation — had experienced a slowdown in their economic activity due to a need for fiat availability after the coronavirus outbreak. — Especially in the US.
On Thursday, April 3rd, CME reported an increase in its open interest of $217 million and its competitor Bakkt, capped at $9.3 million, indicating how quickly their operations react to the behavior of the crypto markets.
CME and Bakkt recorded peak trading volumes of $595 million and $27 million respectively, experiencing the highest growth since March 16, according to data provided by research firm Skew.
Bitcoin begins its rally towards $7,000
Bitcoin is currently being traded at around $6,756 by press time, showing a steady recovery from the bloodshed of previous weeks. As a consequence, the business of derivatives trading is also showing a strong recovery, increasing its trading volume and acceptance, leaving behind the narrative of a correlation between crypto and the traditional stock markets.
If Bitcoin keeps this bullish trend at least for the next days, the markets could begin an optimistic path towards canceling all the losses experienced during the collapse. However, it is testing a minor resistance that could be key for those who rely on sentiment analysis. The $7k price level seems to be a psychological barrier that could be critical to predict what will happen in the immediate future.
Many financial experts believe this could be the perfect moment for bitcoin to show its advantages over the traditional fiat system. In this group, Galaxy Digital CEO, Mike Novogratz said the dollar is nothing more than a kind of money growing on trees, in a clear reference to the recent printing of 6 Trillion dollars ordered as an effort to help the US economy to recover from the coronavirus pandemic.
Unlike the US Dollar, Bitcoin cannot be manipulated or printed by any organization or bank, so maybe if the society sees its value, the price of bitcoin could grow like a tree.