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Bitcoin (BTC) educator Andreas Antonopoulos says that while futures markets may indeed place a damper on the cryptocurrency’s price, the stakes are different to what you might think.

In a Nov. 27 interview with YouTuber “Ivan on Tech,” Antonopoulos argued against the grain of commonplace fears about the adverse price impact that Bitcoin futures trading has on spot prices. 

He suggested it’s the speculators — not the HODLers — who truly have something to fear.

It’s not conspiracy: “it’s the Treasury’s job”

Cash-settled Bitcoin futures — which have been trading since December 2017 on both the Chicago Mercantile Exchange (CME) and Chicago Board of Exchange (CBOE) —  have consistently drawn suspicion from traders and analysts, with many contending that Bitcoin’s price is vulnerable to manipulation in advance of contract settlements.

Antonopolous started the discussion by conceding these fears are likely true:

“We know for a fact that when the Bitcoin bubble started to go up really fast in 2017, the U.S. Treasury decided to fast-track the deployments of futures markets in order to stop that bubble.

A lot of people see that as conspiracy, but if you look at the mandate of institutions like the Treasury, that’s actually their job.”

Price suppression, he claimed, is not a matter of conspiracy, it’s a market-based approach to enable those who don’t believe in cryptocurrencies to take a contrarian position by shorting. 

This has, of course, put a damper on the price, he said — but it’s also reduced volatility. 

A market comprised purely of positive believers — or at least those willing to hold the coin itself — is going to be very “one-sided,” he noted. “It’s not really a market with full liquidity on both sides of the order board.” 

Ironically, naysayers who had once decried volatility are now decrying futures “manipulation,” he quipped.

Unlimited risk

Importantly, Antonopoulos said, futures critics often overlook the real stakes of cash-settled cryptocurrency shorting. 

There’s something “really dangerous about doing cash-settled naked shorts against a cryptocurrency,” for when you borrow Bitcoin as part of a short, your liability — your potential risk — is unlimited:

“If they [institutional investors] faced a situation of a renewed Bitcoin bubble and they continued to take a contrarian position against the market, they’d be throwing fiat into a black hole.”

As reported, Intercontinental Exchange (ICE)’s Bakkt platform has recently confirmed its forthcoming launch of a cash-settled Bitcoin (BTC) futures contract. 

The new product will be settled against data from Bakkt’s existing physically-delivered Bakkt Bitcoin (USD) Monthly Futures contract — a pioneering product that was the first to give futures traders direct exposure to the underlying cryptocurrency.

Cointelegraph By Marie Huillet , 2019-11-28 12:08:00 ,

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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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