CME Bitcoin Futures at a Premium as Sideways Continues – Trustnodes

CME Bitcoin Futures at a Premium as Sideways Continues


CME trading floor

Wall Street appears to be bullish on bitcoin with a premium developing on the only regulated crypto futures exchange within the United States.

A bitcoin equivalent in CME futures is now between $50 to $100 more expensive than buying an actual bitcoin on a spot exchange.

Bitcoin premium on futures, June 2019
Bitcoin premium on futures, June 2019

Wall Street is clearly betting that bitcoin will rise, with their conviction the stronger time goes on as September settled contracts have the highest premium.

They are effectively locking the current price by buying bitcoin futures in a bet price will be higher in September when they have to close the position.

As it stands however, and if we account for bitcoin’s volatility, the cryptocurrency is generally sidewaying, so explaining a considerable fall in futures volumes from above $500 million a day to about $160 million.

Bitcoin’s price on weekly candles, June 2019

As we can see above, the current price level is considerable resistance, as it was considerable support on the way down.

You’d think that would have been at six thousand something, and it sort of was with bitcoin sidewaying at around that level for five weeks before taking $6,000 to then not even pause at $7,000.

Why here, however, at about $8,000 – $9,000, is perhaps far more clearly seen in eth.

Ethereum's price, June 2019
Ethereum’s price, June 2019

Arguably by any fundamentals measure ethereum’s price is extremely undervalued as the crypto is currently processing close to one million transactions a day, with new addresses created and other measures “rationally” suggesting price should be a lot higher.

But the sentiment in ethereum is… well it is quite surprising no one has yet written an article declaring ethereum is dead because this appears to be very much bitcoin 2015 all over for eth.

That may be because $300 is very big resistance and by $300 we mean a range perhaps between $250 and $370.

You can see above now close to two years ago when ethereum sidewayed at around this level for weeks. Currently it is sidewaying too for the past circa 4-5 weeks.

That’s perhaps because bears are arguably very jumpy at these levels and maybe are even scared.

Adoption cycle.

The above can be described as the wave of adoption, the wave of awareness, the law of information travel that maybe confused Einstein in thinking time is relative rather than information, and far more simply can be described as the iconic chart.

So if we invert it and apply it to bears, arguably they’ve long past greed, or even delusion. They’ve maybe even come out of euphoria, and they’re now in denial.

So the market sell off by one bear at the end of last month may have led other bears thinking of return to normal, with them potentially eyeing… well zero preferably.

The problem for bears is this was the second major market sell off in about two months as bears try hold their turf. Eventually they’ll run out of coins to sell, leading to fear for them and for bulls it would be optimism.

What will actually happen, however, no one knows, but it does feel like bulls are building up tension towards restlessness. Hence perhaps why the Wall Street “wiz” are happy to pay a premium.


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