Bitcoin CME Futures Expiration this Friday, Past Data Gives a Positive Picture
- CME Bitcoin futures contracts, where 1 contract equals 5 BTC expiring on Nov. 28
- Weak institutional longs pushing the Bitcoin price lower
Bitcoin is doing exactly what it does before the Bitcoin futures contracts on the Chicago Mercantile Exchange expire, it’s falling.
After staying above $7,000 level in the second half of Monday and throughout Tuesday, today we are back in the red, going as low as $6,847 on Bitstamp. At the time of writing, BTC/USD has been trading at $6,920 with 24 hours loss of over 3%, as per Coincodex while managing the daily trading volume of just $345.6 million.
But as we said this is in line with BTC’s performance before the CME contracts expiration. On Nov 29, this Friday, CME Bitcoin contracts where 1 contacts equal 5 BTC are set to expire. As per the past data, Bitcoin experience selling pressure before the expiration and positive returns after. Analyst and trader Luke Martin shared on Twitter that average and median return one week before the expiration are both negative.
During the last 4 months, price sold off before Bitcoin contracts expired and recorded positive returns after.
Historical $BTC CME futures expiration full data:
•Avg & median return 1-week before expiration both negative
•Last 4 months price sold off before with positive returns after
•If negative return 1-week before expiration, 73% of the time returns are positive 1-week after pic.twitter.com/9SSrINaU1b
— Luke Martin (@VentureCoinist) November 25, 2019
Currently, commentators are bearish on BTC price. Wall Street veteran Peter Brandt has set his target at $5,500. But that’s not all for him, Brandt is expecting a “low in July 2020.”
Bitcoin bulls, as he puts it “must first be fully purged” before the price goes on a rebound.
As we reported, popular analyst Willy Woo says if Bitcoin doesn't close above $8,300 by the end of this month, we are going to have a bearish December and can further test new lows.
Institutional traders Short on Bitcoin price
Recently, the Commodity Futures Trading Commission released the latest Commitment of Traders report for the CME. These crypto derivative products provide exposure to institutional investors and the weekly published COT report highlights traders' position in the market.
Institutional traders' position in the market from the COT report released on Friday
As per the analysis provided by the digital asset advisory firm BitOoda, weak longs have been pushing the prices lower. But this also means that this selloff shouldn't be “as long and as deep as previous bear markets.”
Having said that, BitOoda expects this reduction in long exposure to continue in the coming weeks as it states,
“We would expect the next COT report to have even greater long liquidations due to the uncertainty/rumors surrounding the space.”
It needs to be noted that CME Bitcoin futures are financially-settled and does not involve the exchange of BTC.