Bitcoin Rallies 10% Before CME April Futures Expire

Bitcoin HalvinAs the bitcoin halving draws closer, people are keenly watching its price action. Historically, halvings have been important events in terms of prices. Although, nothing major happens on the day of the halving itself. The effect is mainly seen in the months after the event. The same thing could happen this time around too. The current sentiment sure reflects that. Bitcoin saw a rally of 10% on Thursday after breaking strong resistances.

As Bitcoin touched a new monthly high of $7725. Before that, it was struggling to break the $7600 resistance for quite some time. The rally comes just a day before that CME April Futures expire. This too is a common theme. Every time the CME Futures expire, it brings short term volatility in bitcoin’s prices. It can be an increase or a decrease. Fortunately for those who were long, it was an increase this time around.

More than $68 million worth of contracts (mainly shorts) were liquidated on BitMEX Thursday morning. Although the number pales in comparison to historic events, it is still quite significant.

Increased Volatility Soon?

Bitcoin Volatility

Bitcoin and other cryptos are infamous for high volatility. That is one of the main reasons why they had trouble with global regulators. However, since the crypto markets crashed in January 2018, volatility has dried up. Before then, it was sky high, making gains or losses of 10% almost every day. Some other cryptos like Ethereum used to do even more impressive moves.

Proponents of crypto have been missing the volatility. Not only does it increase the value of their portfolio, but it also provides an opportunity for traders. Both longer’s and shorter’s can make an immense profit during times of volatility. Of course, the risk of losses rises as well.

The volatility in the markets before the expiry of CME Futures provides a little glimpse of what is to come. Bitcoin’s halving is almost here and it will change all sorts of equations. The crypto markets have already recovered 100% from the March 12 crash. Bitcoin had fallen to $3700 and now sits at $7500. The halving could provide the rocket fuel for a new all-time high.

Performance Amid Global Crisis

Many industry experts question whether history will repeat itself. The last two times the global conditions were quite normal. In fact, the legacy markets were on a bull run themselves. This time, things are different. The legacy markets have crashed and there is a pandemic going on. So, some say that bitcoin might not rise as fast as it did previously.

However, others are more positive. They point to the strong recovery of the legacy markets. These are great signs. Also, bitcoin’s macro fundamentals are really strong. The strong recovery from recent lows is proof enough. The halving itself will cut the new supply in half. Even if the demand remains the same as it is now, this is bound to make the prices rise.

Bitcoin Rallies 10% Before CME April Futures Expire