FxWirePro: Bitcoin price discovery through XBT futures and other derivatives news

The recent bitcoin’s price behaviour has been little baffling, it’s become shrewd task for many bitcoin aspirants to forecast accurately whether the streaks of bitcoin’s bullish rallies since mid-December appear to be steady or price slumps resumes as we head towards New Year celebration.

While the current price still remained well above $3,703 levels despite today’s weakness as we approach CME BTC futures expiry (which is on this Friday) but BTC futures price is ticking at $3,864.90 levels, whereas BTC futures price is at $3,725 level as you could observe both price charts.

Please be noted that most importantly, BTC’s average price resides just tad below $3,800, over the 24-hour cycle, it has essentially been remained intact for visionaries of long-term bullish targets, the leading cryptocurrency has been trading in the $3,735-$3,640 range on predominant exchanges such as, Bitstamp, Coinbase, and Gemini etc. More than $100 higher is noticeable, that usually realizes huge premiums for BTCUSD.

Please also be noted that we reiterate the coming Friday would be the latest spell of expiry of CME XBT futures contracts. To wrap-up tough times of 2018, the nature of futures contracts implies that they need to be settled on a set, predefined date, based on a contract. 

Key takeaways to be keenly observed during expiry: CME BTCUSD contracts of Dec’2018 tenors would be traded on or before this expiry period or settled. 

Usually, there would be a slight drop in the trading volumes of futures as it nears expiration, that couples with the volatility factor in the BTC spot market increases every time contract heads towards its expiry date owing to a potential short/long squeezing.

CME BTC futures have emerged as a leader along with CBOE in BTC futures, with sizable and growing USD volume through Q3/Q4 2018.

The bitcoin futures are available comparatively with a lower commission than spot bitcoin trades where charges would be exorbitant. On the flips side, bitcoin futures wouldn’t be available from Friday and usually during weekends as they expire worthless. Whereas in spot trading mechanism, one can hold the possession of units of bitcoins in their respective wallets.

While one can easily observe the bullish price sentiments in cryptocurrency space that have resumed especially since 15thDecember, as the new cryptocurrency start-up established by the Intercontinental Exchange (ICE, namely Bakkt), appears to be well-equipped to unveil bitcoin futures contracts which would be available for the physical delivery facilities. Now, the ball seems to be in CFTC’s court for further developments.

Bakkt would begin trading BTC futures on January 24, 2019 as they are expected to get approval by the United States Commodity Futures Trading Commission (US CFTC). That would certainly be a good reason to celebrate New Year as the CFTC will likely vote on the matter in early 2019, as per the fresh reports.

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards -97 levels (which is bearish), while hourly USD spot index was at 37 (mildly bullish) while articulating (at 08:03 GMT). 

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex