Tom Lee, the co-founder of Fundstrat, who is also known to be bitcoin bull mentioned that the ‘significant volatility’ of the CBOE and CME futures have been ‘awful’. He cited Justin Saslaw, who theorized that Bitcoin price dips with impending expiration. Since the launch of CBOE’s Bitcoin futures; the exchange has settled contracts for six expirations.

Lee has also stated that BTC futures could be linked with the cryptocurrency’s “gut-wrenching” decline. Bloomberg reported his remarks in a report published earlier this week.

"We believe the current path of hash power growth supports a BTC price of about $36,000 by the 2019 year end, with a $20,000-$64,000 range," Sam Doctor, head of data science research at Fundstrat, had said in a report to CNBC.

Futures were unveiled back in last December, ever since then, bitcoin price has tumbled from the peaks of $20k to the current $6,712 levels.

This bearish price behavior is especially because there have been certain causes of concerns that BTC futures could easily be influenced given the low liquidity on many key exchanges and price discovery is also ascertained effortlessly.

So, what drives the price ascertainment? It’s a usual notion that when a derivate trader is long in the underlying Bitcoin, then he simultaneously takes the short futures position on a hedging grounds, as futures contract nears closer to expiration, the holder of the contract can offload a large quantum of the coins at the volume weighted average price (VWAP) to minimize tracking error.

While he sells rest of the amount of BTCs with a view to causing price slumps that in turn likely to affect the short futures position to square off with a more profitable position.

Currency Strength Index: FxWirePro's hourly BTC spot index is flashing at 91 levels (which is bullish), while hourly USD spot index was at 98 (bullish) while articulating at (11:15 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex

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