Bitcoin Sees Small Gain as Gold Rallies to One-Month High

Bitcoin reports moderate gains on Monday as gold, a safe haven asset, recovers amid renewed concerns about the corona virus.
At press time, the price of the cryptocurrency was $ 9,430 - up 1.5% a day - after hitting lows close to $ 9,260 during Asian hours, according to CoinDesk's Bitcoin price index.
However, gold printed a monthly high of $ 1,759 an ounce early Monday and was last trading near $ 1,750.
See also: Bitcoin News Roundup for June 22, 2020
The precious metal appears to be rising as markets focus again on the coronavirus pandemic. In Germany, the USA and other parts of the world, the number of new cases has increased faster in the past few days. Investors appear to be concerned that large economies could again impose barriers to avoid a second wave of outbursts that could worsen an already deep economic crisis.
Some companies, such as technology giant Apple, have already announced temporary store closures in four states after COVID-19 cases increased last week.
The Australian authorities have extended the state of emergency by another four weeks until July 19. In the meantime, the rise in German infection rates due to an outbreak among slaughterhouse workers has sparked a debate about working conditions in the meat processing industry, as the popular macro notes analyst Holger Zschaepitz.
So it may come as no surprise that safe havens such as gold bid. A recent study by blockchain analysis company Chainalysis shows that the majority of Bitcoin is held by those who treat it as "digital gold" or as a long-term asset.
Related: The New Zealand police confiscate $ 90 million in connection with the alleged BTC-e exchange operator
Bitcoin's rise so far on Monday could fuel those who believe in the safe haven history. However, a closer look at the markets suggests that the cryptocurrency is tracking S&P 500 futures.
US stock futures, which fell nearly 1% during early Asian trading, are now up 1%.
While gold has gained over 5% in the past two weeks, bitcoin has been largely limited to a narrow range of $ 9,000 to $ 10,000 since halving on May 11.
Future fatigue?
With the top cryptocurrency rally seeming to have stalled after the March 13 low of $ 3,867 near $ 10,000, institutional analysts are temporarily exhausted, according to an analyst.
“With the CME futures, we see some signs that the bulls are getting tired and waiting for a breakout above $ 10,000. The average daily trading volume is declining, which is not surprising as it follows price volatility. At the same time, however, open interest is declining, ”says Ecoinometrics, a Bitcoin analysis company.
As of Friday, futures listed on the Chicago Mercantile Exchange (CME), generally considered synonymous with institutional activity, traded at $ 195 million, a decrease of almost 80% from the May 911 high of 914 million USD corresponds to research company for crypto-derivative skew.
In addition, Friday's open interest - the number of contracts traded but not offset by offsetting positions - was $ 394 million, a decrease of 26% from a peak of $ 532 million on May 19.
While futures activity is slowing, CME options are reporting an open record interest.
Options contracts worth $ 417 million were opened on CME on Friday, an amazing 3,000% increase from the $ 13 million observed on May 1.
In this respect, one can argue that the institutional interest in Bitcoin has not waned, but has only shifted instruments.
It remains to be seen whether the record open interest for options after the expiry of the June contracts this Friday will be transferred to July expiry contracts.
At the current time, according to Skew, 114,000 contracts expired on June 26th. If this open interest is not carried over to July / September, this would confirm what futures activities suggest.
"The last two months at the end of the month / end of the month (end of April / beginning of May and beginning of June) have both seen major upward movements as obsolete positions have been reduced and new positions created," said QCP Capital from Singapore on his telegram channel. "We wonder if this can be due to such a large open interest, which mainly consists of upward calls, 3 in a row, or whether the short-term institutional upward movement has largely subsided."
Disclosure: The author does not have a cryptocurrency at the time of writing.
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Bitcoin sees a small gain when gold rises to a monthly high
Bitcoin sees a small gain when gold rises to a monthly high

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