BTC - Bitcoin Futures possibly pointing to medium term upsidesteemCreated with Sketch.

in bitcoin •  2 months ago

The Futures markets are starting to look a little more bullish for bitcoin

Over the last week, the premium on bitcoin futures has been rising.

Specifically for the March 2020 CME contracts.

In fact, from November 29th to December 2nd, the premium increased by roughly 30% while the bitcoin price dropped roughly 6%.

Which is something we haven't seen much of lately.

(Source: https://kryptografen.com/wp-content/uploads/2019/12/Weekly-update-Arcane-Research-Week-49.pdf)

Interestingly enough, the CME contracts increased more than most other derivatives platforms, though they showed increases as well.

A change in sentiment?

Previously, we had actually been seeing longer dated contracts predicting lower prices for bitcoin as opposed to higher.

This recent surge represents a possible changing sentiment in futures markets.

In a report put out by Arcane Research, analysts noted the following:

"The premium rates on bitcoin March 2020 contracts have been increasing, although the bitcoin price has decreased, this is not a common observation."

"Bitcoin's implied volatility is set to rise to over 70% by June 2020, up from 55% for the middle of December 2019."

"This clearly shows that traders anticipate changes in the bitcoin price. To put this in perspective, gold options for June 2020 trade with an implied volatility of 11.5%."

(Source: https://kryptografen.com/wp-content/uploads/2019/12/Weekly-update-Arcane-Research-Week-49.pdf)

Increases in volatility have lately correlated with price drops

However, with medium term futures prices starting to perk up a bit along with the volatility increases, perhaps we will see some volatility to the upside as we move into the near year.

In my opinion, most likely it is related to investors thinking prices are going to start moving as we get closer to the halving (which is in early May of 2020), possibly to the upside, and positioning accordingly.

We shall see.

Stay informed my friends.

-Doc

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

let see how long it takes for bitcoin to break 8k

·

We need to break about $8.2k to break the 6 month losing streak we are currently on as well.

We rallied yesterday and didn't sell off overnight and in Asia. Haven't seen that in quite a while. I am used to getting up in the morning and checking how much BTC bled out overnight. So that was a nice change.

·

Ha, yep I am used to seeing the same.

·
·

Although selling a bit tonight (Sat) in Asia kind of looks like the same ol song and dance.

Some neat data here, and thanks for sharing. I suppose the first task would be to break the $7.8K resistance point, of which we've been rejected sharply. Once we break there, it's $8.2K next.

Nevertheless, with expectations of higher volatility next year, it'll be quite the ride to see how Bitcoin's price reacts, as we're quickly approaching halving day.

·

It's amazing to me these halvings don't get priced in more than they are well in advance.