BTC stays on the fence despite this key crypto twist in traditional finance
- One of the biggest banks in the world just gave a nod to Bitcoin by launching crypto custody services.
- Bitcoin’s latest bullish divergence may be because of rising derivatives open interest and surging whale demand.
Bitcoin’s next major rally might be spectacular and this is being concluded not because of its past performance. Where there is smoke, there is fire and there’s been more than adequate signs suggesting that momentum is starting to build up.
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Deutsche Bank, one of the largest financial institutions in the world has reportedly launched crypto custody services. This is the latest development pointing toward Bitcoin’s changing tide. So why is it so important?
Mega bank, Deutsche Bank (1.4 trillion), is now offering Bitcoin and crypto custody services.
The pieces are coming together.
— Lark Davis (@TheCryptoLark) September 14, 2023
Well, not so long ago, the banking and traditional finance industry saw Bitcoin as a threat and stood against it. The announcement represents the change that has been taking place over the last few months and more importantly, banks are changing their minds about Bitcoin.
The development adds to the list of Bitcoin-centric outcomes that have been aligning in favor of a bullish outcome. The fact that a major global bank is venturing into Bitcoin custody suggests that there is a growing demand for cryptocurrencies from their customers. The list definitely includes institutional clients.
The higher confidence coming from the banking institution coupled with more institutional involvement could yield a bigger rally than the previous bull run. While the development highlights long-term prospects, there are signs that the short-term situation might be about to change.
Bitcoin’s price action reveals a bullish divergence
BTC’s price action revealed that the price has been dipping to lower lows while the Relative Strength Index (RSI) has higher lows. Such divergence is often observed when a pivot is forming. Could this development validate the extension of Bitcoin’s rally which commenced on 12 September?
We previously observed a death cross forming on Bitcoin’s price chart but the price rallied instead of extending its downside. However, the death cross is a lagging indicator since it highlights what has already happened.
But, it is entirely possible that the whales might be manipulating the market by moving contrary to expectations. In that case, the divergence might not be a very reliable sign that Bitcoin will sustain the current rally.
How many are 1,10,100 BTCs worth today
More downside still stands as a possibility especially now that volatility was seen returning to the market. This was evident by the recent resurgence of demand in the options and futures segment. Both the futures and options open interest registered a spike in demand in the last five days.
Higher volatility might encourage more whale activity. It is thus, worth noting that whales have also been buying. However, there is still some uncertainty regarding the U.S. Federal Reserve’s next interest rate decision. Higher interest rates would likely cut short the current rally.