Bitcoin is trading on the back foot today following the bullish debut of futures on the CME.

Having clocked a new all-time high of $19,783 at 12:14 GMT yesterday, CoinDesk’s Bitcoin Price Index (BPI) is trading at $19,178. Further, data source CoinMarketCap shows bitcoin (BTC) has depreciated by 2.77 percent in the last 24 hours.

And that remains the state of play after bitcoin crossed the $20,000 mark on Asian exchanges yesterday, but failed to follow suit on major Western exchanges. On Coinbase’s GDAX exchange, for instance, bitcoin rose to a record $19,891 before falling to a low of $18,200 and recovering in line with the BPI.

As such, it remains to be seen whether the launch of BTC derivatives will bring institutional money into the cryptocurrency space. For now, it appears the BTC bulls are having a breather as the move to mainstream may have been priced-in.

The price chart analysis also indicates the potential for a pullback.

Bitcoin chart

The above chart (prices as per Coinbase) shows:

Low volume lift: The rally from the Dec. 10 low of $13,501 lacks substance, i.e. volumes have steadily declined. Also, volumes have remained below the 30-day moving average since Dec. 12.

Potential bearish divergence: The relative strength index (RSI) has formed lower highs, while the price has clocked higher highs ($19,697 on Dec. 7 and $19,891 yesterday). A weak close (as per UTC) today would confirm bearish divergence.

The 5-day MA and 10-DMA are curled up in favor of the bulls.

View

The sharp recovery from the intra-day low of $18,200 to $19,350 is encouraging, but a pullback to $16,498 (23.6 percent Fibonacci retracement of Nov/Dec rally) cannot be ruled out, given the weak volumes and the potential for “sell the news” trading.

Also, a close today below $18,200 would confirm bearish price RSI divergence and could yield a deeper pullback to sub-$15,000 levels. History shows, BTC has witnessed a significant drop following the confirmation of the bearish RSI divergence on the daily chart.

On the higher side, $20,000 is a major resistance. A high volume breakout may open doors for $24,000 as expected by a significant minority in the markets.

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