Cryptocurrency Derivatives Series: Bitcoin Price Dips on BTC CME Futures Expiry Season, Technicals Indicate Bullish Traction

It was a bearish end to August for the crypto asset markets. Market benchmark BTC fell 5% over the last 7 days, while the overall crypto market cap pulled back 5%. The week was underscored by a sudden drop on the 28thof August that saw the BTC price fall 7% ($10,200 to $9,500) in just a few minutes. 

A probable cause of this drop was the close of a major round of CME Bitcoin futures contracts. Over 50% of CME Bitcoin futures open interest expired last week. It’s likely that most of this money flowed out of Bitcoin futures and into other derivative markets. 

Daily volumes for BTC on the CME have been steadily falling over the last two months and institutional traders may be looking at other asset markets for new profit opportunities.

The BTC markets were able to consolidate following Wednesday’s drop with the $9500 level acting as support as the week progressed.

As you could refer to BTC CME Futures price chart of daily plotting, hammer pattern candlesticks have occurred at $9,550 and $9,520 levels and taken off rallies above DMAs with bullish crossovers.

Last week, gap-up pattern has occurred at $10,485 levels to indicate the significance of short-term bullish traction.

While both leading oscillators (RSI and stochastic curves) show the upward convergence to the prevailing price rallies to indicate the intensified bullish momentum.

To substantiate these buying sentiments, bullish MACD crossover also signals the minor uptrend is likely to prolong further.

Couple of analysts now expect the underlying price of Bitcoin likely to continue climbing throughout the week. We are now looking for a close above $10,900 in the short term.