Bitcoin price has been rallying above the $9k mark, surged to $9,439 level which is a new 3-months high intensifies the prevailing uptrend. Thereby, it has shown a rock solid 30% price gains in New-Year series.

Technically, BTCUSD has broken out range resistance upon engulfing patterns (refer daily plotting), while bulls have taken-off well above 7, 21 & 100-DMAs with bullish crossovers to hit 3-months highs.

During such bullish rout, the pair has formed inverse saucer pattern to indicate the current buying sentiments coupled with both leading and lagging oscillators which is in line with the uptrend.

On broader perspective, it has bounced back from $3,128 to $13,880, but paired gains in the H2'2019 as shooting star patterns plummet prices below EMAs (refer weekly chart).

On the contrary, bulls bounce back with engulfing & hammer patterns at $7,165.72 and $9,360 levels. Consequently, the major trend jumps back above $9k and 21-EMA levels.

Hence, advocated longs in CME BTC Futures of January deliveries in our recent write-up on both hedging and trading grounds (when spot reference: $6,305). We wish to uphold the same strategy by rolling over longs in CME BTC Futures of February deliveries.

Unfortunately for hopeful market participants, Bakkt’s options trading volumes have had a tepid start, since then it has failed to show traces of expressing any sort of overt widespread adoption.

This lack of use Bakkt’s physically settled BTC options is cause of concern revolving around crypto-community. However, since the CME’s bitcoin options contracts were launched on Jan 13th, the open interest has risen to above $10mn according to data from skew.com, well above the peak thus far of the previously listed ICE/Bakkt options just over $1mn. This still remains well below the around $540mn of open interest on Derebit/LedgerX, which form the bulk of the total open interest in Bitcoin options (refer 3rd chart).

Please be noted that the premium rates on CME for March 2020 contracts recorded a dip of 1.61%. For the trading purpose, avoid contracts with lower volumes and lower open interest.

Moreover, while there is a gap between the open interest between offshore unregulated venues and the CME for futures, a substantial part of this difference is likely due to leverage. The minimum initial margin on offshore unregulated venues is typically around 1%, compared to the CME’s initial margin of 37%.

For options, by contrast, there is less reason to expect such a divergence to persist, as margins are not used in the same way to gain leverage as for futures. Also, some hedge funds who do not necessarily have a fundamental view on bitcoin direction could see opportunities in trading volatility. The CME’s reputation and credibility in US derivatives markets more broadly could be a substantial advantage in attracting those potential market participants.