Today Bitcoin futures started trading at the CME (Chicago Mercantile Exchange). This exchange is considerably larger than CBOE, which started trading Bitcoin futures a week ago.
Before the opening of the new futures contracts on the CME Exchange, Bitcoin price dropped below $18,000 but is now recovering some of those losses and currently hovers near $19,000 trying to push higher.
There is presently a nice bullish pin bar forming on the BTCUSD D1 chart (Bitstamp) but it’s too early to tell where it will close.
Recalling the dip in price of Bitcoin before new futures were traded on the CBOE, shows us that a similar pattern is most likely developing here with the introduction of Bitcoin futures on CME.
Bitcoin futures contracts allow investors to get exposure to Bitcoin without having to actually own any or worry about its storage or security.
Since the CME exchange is much bigger than the CBOE we might see the price of Bitcoin being pushed to new levels.
Institutional traders are currently not allowed to buy Bitcoin as it is still unregulated. However, they are allowed to buy futures contracts.
Volumes are going to slowly increase as professional traders get comfortable with the price action and more importantly get comfortable with the volatility. – Matt Osborne, chief investment officer of Altegris
Some traders anticipate a bigger Bitcoin correction very soon, but many also agree that it won’t happen until it BTCUSD reaches $25,000.
But if a lot of money is invested in Futures short contracts (contracts which bet on the lower price of Bitcoin in the future), that can expose Bitcoin’s volatility soon.
Note. This post is for educational and entertainment use only and it is not an invitation to trade. Trading involves high risk to your capital.