The impact of Bitcoin CME Futures
Today we will see why it is interesting to always look at the Bitcoin CME Futures graph after a big pump. But first of all, we will explain what it is all about.
- Futures contracts are part of financial instruments called derivatives. They allow you to speculate on the price of an underlying asset without having to hold it. In our case, we are going to talk about future Bitcoin contracts. Traders have the opportunity to generate gains/losses by purchasing/selling such contracts. These contracts can be leveraged to increase the number of contracts.
- The CME, or Commodity Futures Trading Commission, is an American financial company that emerged from the Chicago Mercantile Exchange. It is the world’s leading futures exchange company. Since mid-December 2017, the CME has been offering its customers the purchase/sale of Bitcoin futures contracts. CME also offers futures on traditional commodities such as gold, oil or corn, currencies or financial indices.
- It should be noted that unlike the 24/7 crypto-currency market, the futures market is open from Monday to Friday from 10pm to 8.30pm (UTC). It is closed on weekends and some US holidays. As a result, the chart of the futures market is not “continuous” and if we compare it to the chart of the evolution of the price of bitcoin we can see empty spaces. These spaces are most of the time filled. This sometimes takes a few days and sometimes several months.
Why are we telling you all this?
We can notice that the pump that took place on the weekend of May 25/26 left a gap. However, as we have seen previously, the gap should be filled at some point.
Does that mean that Bitcoin will fall now to fill this space?
We can’t say that because as you can see on the graph it can take a few days or even several months. And nothing prevents the price of Bitcoin from continuing to rise as it did during the July/August 2018 period.
To be continued. Stay careful,
📈 Graphic: https://www.tradingview.com/x/QsrCfm94/
Nico, trading analyst at Crypto-Addicts.
Warning, these are estimates and it is obviously necessary to monitor BTC and its evolution. This is a trading plan and not a prediction. Invest only what you can afford to lose.
