Bitcoin rallies after Russia hints at using crypto with $50,000 seen possible on short covering
Bitcoin on Friday briefly traded above $45,000, a psychological level, as financial institutions pushed further into the digital asset space, while Russia hinted at the possibility of accepting bitcoin as payment for the country’s commodities.
The cryptocurrency BTCUSD,
Pavel Zavalny, the head of Russia’s State Duma committee on energy, said on Thursday that the government would be open to more flexible options on paying for its oil and gas from “‘friendly” nations.
“We’ve been offering China to switch to transacting in national currencies, such as the Ruble and the Renminbi, for a while now,” he said, according to a translated report of those comments. “With Turkey, that would be the Lira and Ruble. Currency sets can be different; it’s a common practice. You can also trade bitcoins.”
Read: Russia hints that it may accept payment for oil in bitcoin, analysts say that may not be so easy
Meanwhile, Wall Street firms are pushing further into the digital asset space. Goldman Sachs GS,
Read more: Russia-Ukraine war could accelerate use of digital currencies, BlackRock’s Larry Fink says
The annualized rolling premium for one-month bitcoin futures on the Chicago Mercantile Exchange, the preferred avenue for institutions’ exposure to bitcoin, rose above 7% on Thursday for the first time since December, according to data analytics firm Skew. Meanwhile, open interests of bitcoin futures, which refer to the total number of outstanding contracts, rose to its highest level on CME on Thursday since Jan.3.
Such levels indicate growing institutional interest, Noelle Acheson, head of market insights at crypto broker Genesis Trading wrote on Twitter.
In addition, the funding rates of bitcoin perpetual futures turned into negative territory, showing that short sellers have accumulated their positions, according to Yuya Hasegawa, analyst at Tokyo-based crypto exchange Bitbank.
“The accumulated short positions could result in a cascade of short covering in case of breakout, which, in turn, could push up the price significantly,” Hasegawa wrote in notes on Friday.
The upper price target in the short term will be between $48,000 and $50,000, Hasegawa added.
“Unless there are big, bad headlines out of Ukraine (e.g. an encroachment by Russia on Poland), I think that Bitcoin is poised to crack $50k within the next few days,” David Tawil, president and co-founder at crypto hedge fund ProChain Capital, wrote to MarketWatch in emailed comments.
U.S. stocks traded lower around Friday noontime. The Dow Jones Industrial Average DJIA,
