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The recent revelation that BAKKT Bitcoin futures are only 37% backed with physical bitcoin crushes the continuous myth of “fully Bakkt” futures. This comes months following the revelation that only 70% of Tether (USDT) is backed and raises the question on whether the whole crypto field is manipulated in one way or another.

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Stabbed in the BAKKT

A number of investors in physically settled bitcoin futures have held on to the belief that “Bakkt futures are fully collateralized or pre-funded (as they were to be)”. However, a recent FAQ on the Bakkt website cleared up the myth stating around 37% of the futures are backed by dollars of treasuries.

With such a grave realization coming to light, the whole sentiment on Bakkt boosting Bitcoin adaption crumbles as over a third of the contracts remains cash-settled. The futures were tipped to be the golden child of the pioneer cryptocurrency as perma bulls saw it as an opportunity for institutional investors to take up the digital asset.

However, the futures are yet to materialize with Bitcoin’s price on the dump despite the rising volumes on Bakkt. Explaining the overall layout of how the process at Bakkt works, Alex tweeted,

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BTC perma bulls on the wrong side of the trade

As CFTC-regulated Bakkt keeps on celebrating new milestones in volumes traded, the effect on Bitcoin’s price remains no-existent. At launch, less than 50 BTC futures contracts were traded in the first 24 hours, raising derision amongst the community. And even when the volumes started rising, BTC’s price remained rather stagnant despite a short spike to $10,000 USD in late October.

Bakkt BTCUSD

Currently at $7,330 USD on Coinbase, bulls are starting to agonize on the overall state of the market as a failure to close above the bearish wedge formation on the daily charts spells doom for the price.

While Bakkt’s influence remains unnoticed in BTC’s market, 2020 will present a fine chance for the ICE-owned facility to influence the market as the halving approaches.

Summary

Bakkt futures raises controversy as its effect on Bitcoin (BTC) remains unnoticed

Article Name

Bakkt futures raises controversy as its effect on Bitcoin (BTC) remains unnoticed

Description

The recent revelation that BAKKT Bitcoin futures are only 37% backed with physical bitcoin crushes the continuous myth of “fully Bakkt” futures. This comes months following the revelation that only 70% of Tether (USDT) is backed and raises the question on whether the whole crypto field is manipulated in one way or another.

Author

Lujan Odera

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Coingape

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cryptocoach

Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.

Disclaimer
The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.



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Lujan Odera , 2019-12-03 19:31:26 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.


While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock


Nick Chong , 2019-11-10 12:00:38

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