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The much-hyped Bitcoin futures platform Bakkt has just hit a new all-time high in terms of its daily trading volume. After a meagre start back in September, interest in trading the financial product is finally starting to pick up.

However, the growth in interest isn’t quite the bullish news that many have welcomed it as. A crypto market analyst has reminded those optimistic about the platform’s recent performance that the number of Bitcoin actually changing hands at Bakkt remains close to zero.

Just 17 Bitcoin Were “Physically Delivered” in November at Bakkt

As per a tweet by Twitter-based Bakkt analysis service Bakkt Volume Bot (@BakktBot), yesterday saw a record number of Bitcoin futures contracts trade at the regulated venue. A total of 5,671 contracts traded, around $42.52 million at the time of writing.

The volume represents a significant increase on the prior all-time high of $20.3 million, recorded on November 25. Although not spectacular when compared to either the CME Group’s own futures volume or trade volumes seen at leading crypto exchanges, the contrast between the recent performances and the sub-million-dollar days reported immediately following the Bakkt launch is notable.

The initial poor performance of Bakkt disappointed many Bitcoin proponents at its debut. However, with the rising volume, optimism about the platform’s impact on the market is once again growing.

Pouring cold water on the bullishness is trader and analyst Alex Krüger (@krugermacro). He reminds those getting excited about new all-time highs in Bakkt volume to consider the products on offer at the platform more closely. Bakkt offers two distinct products, and the all-time high in volume is not in the physically-settled daily Bitcoin futures contracts that had most people excited prior to the launch. Instead it’s in the monthly cash-settled futures also offered at the venue.

For Krüger, the rising interest in trading the products is positive for Bitcoin in general but he points out that it does not mean that institutions are suddenly keen to take receipt of Bitcoin themselves via the Bakkt Warehouse custody solution.

Unfortunately, the actually physically-settled Bitcoin futures (the daily ones) are not seeing anywhere near the same interest as the monthly ones. In fact, as Krüger points out their volume is “zero… everyday.” The low trade volume has meant that so far in November and October combined, just 32 Bitcoin have actually changed hands via physically-settled contracts.

Given that almost none of the trading at Bakkt currently involves Bitcoin being delivered, the platform will mostly only impact the price in the way that the CME Group’s futures do, rather than physical receipt driving the price up as people had hoped. Many commentators have previously argued that such futures products can exert downwards pressure on the price and are nowhere near as bullish as people believed them to be. Indeed, the CME Group’s Leo Melamed told Reuters at the December 2018 launch of his own trading venue’s Bitcoin futures contracts:

“That’s a very important step for Bitcoin’s history… We will regulate, make Bitcoin not wild, nor wilder. We’ll tame it into a regular type instrument of trade with rules.”


Related Reading: Bakkt Bitcoin Futures Reach Record High as BTC Options Launch Nears

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Rick D. , 2019-11-28 22:00:36

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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.

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

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