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The CME Bitcoin Futures market is worryingly losing appeal to institutional investors as the number of long contracts experienced a 300%+ plummet in open interest recording the lowest weekly drop four months. The number of open interest long contracts on CME is now at October lows despite the 200%+ increase last month.

According to data collected on Skew, a crypto data analytics firm, the open interest in long contracts by institutional investors saw the largest week on week drop in three months. Having recorded a high of 805 BTC futures at the start of September, the number plummeted gradually to -290 long contract of BTC on October 1st.

November wipes out 3 months gain in CME BTC Futures

During the month of October, the open interest in long contracts exponentially increased as Bitcoin’s price grew by 42% in a day to test the $10,000 resistance level. As the bearish sentiments faded and bulls took over the market, the CME Bitcoin Futures Net Open Interest grew from 195 longs to 660 longs in three weeks representing nearly 240% increase during the period.

A week later, the longs grew to 870 open long contracts on BTC cash-settled futures closing at its highest point in the four preceding months. However, a crash in Bitcoin’s price towards the lower $8,500 region at the start of the weekend has wiped off most of the institutional interest in BTC futures witnessing a mammoth wipeout of 675 long contracts.

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Alex Kruger, Colombian economist, and crypto analyst warned on the possibility of an upcoming bearish run on the price of Bitcoin. Bakkt futures have been on the rise in the past few weeks witnessing all-time highs (ATH) during the week crossing the $15 million USD mark. However, CME Futures is now at 2018 levels which is a bearish signal for the pioneer cryptocurrency.

Bitcoin is headed to all-time highs

Despite the slow growth in Bitcoin’s cash-settled futures, the crypto is still on road to breaking all-time highs. The current reversal in price towards the $8,500 support levels may act as a catalyst to push the price above $10,000 levels, our trading expert, John Isige wrote on Nov. 8.

With the halving fast approaching, Jason A. Williams, Co-founder, and Partner at Morgan Creek Digital believes the price of BTC is set to explode. He tweeted,

Summary

CME Bitcoin Futures Drops by 300% in the Past Week as Institutional Open interest Drops

Article Name

CME Bitcoin Futures Drops by 300% in the Past Week as Institutional Open interest Drops

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The CME Bitcoin Futures market is worryingly losing appeal to institutional investors as the number of long contracts experienced a 300%+ plummet in open interest recording the lowest weekly drop four months. The number of open interest long contracts on CME is now at October lows despite the 200%+ increase last month.

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Lujan Odera

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Coingape

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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.

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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 , 2019-11-10 15:24:08 ,

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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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