Just as Americans were preparing to enjoy their Independence Day holiday, Bitcoin investors were busy following the cryptocurrency markets and taking long positions as hints of a long-awaited rally appeared to materialize.
The very first trading session of July resulted in a quick price recovery for Bitcoin; at one point, the most valuable cryptocurrency in the world had gained 12 percent in just one day before settling around $6,600. This spike was followed by a requisite sell-off by day traders, but the market would later even out.
According to Japanese economist Yukio Noguchi, the current rally conditions can be explained by activity in the Bitcoin futures markets at the Chicago Mercantile Exchange and the Board Options Exchange. When these securities were introduced in late 2017, traders immediately started writing short contracts; in fact, the ability to short Bitcoin was the principal motivator behind the creation of these instruments. Now that Bitcoin futures have matured, traders are showing a greater interest in going long, this could very well translate into a rally motivator.
Noguchi further believes that Bitcoin futures will cut down on volatility, which would bring about a more stable rally instead of rocketing towards $10,000 in just a few weeks.
Economists from the United States Federal Reserve have also commented on the Bitcoin recovery, mentioning that it is in line with what should be expected when new commodities are introduced to the futures market. Still, there is one more factor to consider, and it belongs in the category of fundamental analysis: July is the month that G20 finance officials had designated as a deadline to submit recommendations related to blockchain technology.