Cryptocurrency Derivatives Series: Bitcoin Bears Filling-in CME BTC Futures Price Gaps

Although Year-2019 has been instrumental for bitcoin exchanges, crypto-traders and investors, it has been little turbulent. At the beginning of the year, BTCUSD price surged from the lows of $3,122 to the recent highs of $13,880 levels (i.e. mammoth returns of 344 in percentage terms that too within a span of 6 months or so, refer 1st chart). However, such robust uptrend has generated various price gaps in the CME Bitcoin futures contracts. Here is our reporting of the same back in June, please go through below weblink:

https://www.econotimes.com/Cryptocurrency-Derivatives-Series-Short-Squeezes-in-CME-Bitcoin-Futures-Contracts-Form-Frequent-Gaps-1554050

Countering these rallies, bears resume and the pair started sliding again despite registering its most profitable quarter performance since December 2017. It is currently trading shy below $8k levels (while articulating), slump of more than 19.67% on a weekly adjusted timeframe. Such slumps dragged the bitcoin’s market capitalization close to $145.62 billions as per coinmarketcap. 

Although there have been some sort of constructive news flowing in cryptocurrency derivatives market, just like Bakkt’s that has gone live as scheduled on 23rd September but with a mild start, Bitcoin CME futures price of front-end month contracts have continued the bearish streaks 5-consecutive days in a row. Please be noted that these slumps have filled-in the price gap-ups in the previous rallies which are perceived to be healthy corrections (refer 2nd chart).

The clients’ bitcoins at Bakkt, are now stored in the Bakkt warehouse which is functioned by Bakkt Trust Company Llc who assumes to be a qualified custodian, regulated by the NYSDFS (New York State Department of Financial Services).

While the Bitcoin (BTC) futures here are subject to the settlement arrangement of physical delivery, it has shown the total trading volume on the platform at the time of articulating as 140 Bitcoins trading at $8,170.00 levels.

Another case suggests that the cryptocurrency industry is maturing and that appears to be slow and steady increase of the regulated futures gamut. A Bitwise published research paper indicates that the average daily trading volume for bitcoin futures last month was a massive, $234,385,300.