Cryptocurrency Derivatives Series: Quick Run Through on CME BTCX’2019 Expiry Season

This Friday is going to be the latest round of CME quarterly Bitcoin futures expires. These futures contracts would have to be settled on 2nd December. All CME contracts will have to be traded, or settled, before this date.

BTCUSD is down about 7.69% while articulating, breaking below key support at $7,386 to a six-month low of $6,526 levels.

Technically, BTCX’2019 (CME BTC Futures) gap-up is now filled-in, gap-down pattern has now formed (refer 1st chart), good time to build fresh longs around $6-6.5k levels on oversold sentiments.

However, the Bitcoin price sentiments would usually be bullish with an uncertain timeline. The price volatility often goes in favour of the hodlers of the contracts in the long run. The past two years are starting to see the increasing role of crypto-derivatives traders are conducive due to the underlying price drops in BTCUSD.

There is generally a fall in the trading volume of futures during the course of the expiration. This can tend to coincide with a rise in volatility and the potential for short/long squeezing. With BTC markets currently going through a period of higher than usual volatility, the Friday contract close may trigger another weekend of intense price moves.

While the current invalidation of the bull market has the traders start looking for a bottom in Bitcoin’s price, this is substantiated by some key technical indications.

Back-to-back hammer patterns on BTCX daily chart which is coupled with oversold pressures, same is the case on the underlying price chart as well (refer 2nd chart).

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