Bitcoin (BTC) and Ether (ETH) have steadily reached new highs, leading to a significant increase in volume and open interest in the bitcoin futures market. Open interest refers to the total number of active transactions in the bitcoin derivatives market. Open interest in the bitcoin futures market is currently hovering around a record high of $27.43 billion.

According to the Coinbase listing, traders and investors in general expect bitcoin and Ether to continue their upward trend. However, there are also instances of short-term declines due to various factors, including a possible news sell-off scenario and an overheated futures market.

Bull’s arguments for a listing after the merger

According to Adam Cochran, a partner at Cinneamhain Ventures, bitcoin should theoretically be worth $70,000 if it is listed on Coinbase. The investor said the reason for BTC’s gradual uptrend is the use of high leverage in the bitcoin futures market, which causes BTC to fall when the futures market overheats.

High leverage can lead to short-term declines, as a large percentage of highly leveraged buy orders or market timing increases coverage over the long term. Funding is a mechanism used by bitcoin futures exchanges to achieve market equilibrium.

The more buyers in the market, the higher the financing rate. When funding rates rise, buyers must compensate short sellers for some of their position. Since buyers have to pay sellers every eight hours to keep their positions open, it becomes less attractive to buy long bitcoins, leaving them vulnerable to a decline. Cochrane said:

It’s crazy that we reached the new ATH of $BTC the day before Coinbase went public, and that begins 6 months of new launches, upgrades and institutional adoption with ETFs, etc. And it seems we haven’t had the mania and FOMO fever of 2017 yet. Are you feeling… on the right track right now?

He added: The only reason $BTC isn’t worth $70k anymore is because young traders don’t know how to use leverage without getting a mega bang every time it’s raised.

Although the bitcoin price is hovering around an all-time high, the relative strength index is lower than in 2017, when the price was at the peak of its previous rise. When the price of bitcoin collapsed in short order, the RSI was at 95. The RSI is currently at 92, which is lower than 2017, 2013 and 2011.

PlanB, maker of the stock-to-flow indicator – which predicts bitcoin will likely reach $200,000 – said BTC is expected to rally to $92,000 to reach an RSI of 95. The analyst said: Bitcoin has an RSI of 92.

Bitcoin price jumps ahead of Coinbase’s IPO. Investors and traders generally believe that the cryptocurrency market will continue to move higher after Coinbase’s listing, primarily due to strong market momentum. However, some believe that the listing of the stock that will trade under the ticker COIN marks a temporary peak for cryptocurrencies.

What will happen to Bitcoin price as Coinbase goes public?

Blockchain data also suggests that bitcoin is in a favorable position to see a broader rally. Elias Simos, a protocol specialist at Bison Trails, said bitcoin shipments between addresses holding between 100 and 1,000 BTC have reached record levels. This suggests that the number of high net worth investors owning bitcoins is increasing. He stated:

The delivery of $BTC to addresses with 100 to 1 kb of coins has reached record levels! This increase was at the expense of the lower (1-100) and higher (1k-10k) cohorts. The reshuffle doesn’t stop there.

Aside from bitcoin’s technical and fundamental strengths that led to Coinbase’s IPO, the overall sentiment surrounding the event remains extremely positive. Nic Carter, a long-time bitcoin investor and researcher, says COIN is gearing up to be one of the most explosive IPOs in the history of the US stock market:

As COIN prepares to become the most explosive IPO in history, GBTC overtakes GLD as the largest commodity tracker, and BTC surpasses the value of the British pound’s monetary base, take a moment to take it all in. So get back to work.

While much of the interest stems from the fact that a major US cryptocurrency exchange is taking its first steps into the stock market, Coinbase’s financials have impressed investors in the traditional financial market. Anthony Pompliano, a prominent bitcoin investor and co-founder of Morgan Creek Digital, noted in early April that Coinbase had generated more revenue in the past 90 days than in all of 2020.

Bearish case according to basic parts list

The main bearish case related to Coinbase’s listing remains the high probability of a sell-off in the crypto-currency market. It’s also possible that buyers will flock to COINs and possibly sell Bitcoin, Ether and other major cryptocurrencies.

Mohit Soruth, partner at Bitazu Capital, also pointed out that he believes the final phase of the bitcoin bull market has begun, based on historical trends. He said: To be honest, I seriously believe we have entered the final phase of this bull market for the $btc. Let’s be clear: The final phase may take 2 to 3 weeks or longer. The price could be 200,000 or even more, who knows. But don’t make irrational decisions based on an unrealized PnL.

What will happen to Bitcoin price as Coinbase goes public?

In addition to the possibility of a peak approaching for the cryptocurrency market, the bitcoin futures market’s funding ratio averages 0.11%. The standard funding rate for bitcoin is 0.01%, so it’s 11 times higher. Therefore, the probability of a short-term correction remains relatively high.

frequently asked questions

At what price is the IPO valued on a currency basis?

Coinbase will begin public trading Wednesday after NASDAQ, the exchange on which Coinbase shares will be listed, set a benchmark price of $250 per share.

What does Coinbase’s public issue mean?

The shares of a cryptocurrency company are made public through a direct listing rather than a traditional IPO, meaning that the company is not selling its shares to raise money, but simply to have its shares publicly traded for the first time. Negotiations are expected to begin Wednesday.

What does a currency-based IPO mean for bitcoin?

Coinbase’s direct listing is a game changer for the crypto industry. … In a direct listing, a company places its shares on the stock exchange, but without recourse to banks to guarantee the transaction, as in an initial public offering.

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