Bitcoin Futures Continues Making Bitcoin Price Ridiculously Predictable

Journalist:
Will Heasman @wjheasman
September 4, 2019

Bitcoin (BTC) started this week off in good spirits, citing an impressive rise of around 8%. Interestingly, analysts are attributing some of this action to the close of the Chicago Mercantile Exchange (CME).

Bitcoin’s 8% rise this week which left a gap in the CME futures chart | Source: TradingView

On Labor Day, September 2, the CME closed up shop. Far from the typical bloody Monday the cryptocurrency markets typically exhibit, many crypto assets shot up seemingly following BTC’s price increase.

Analysts, Alex Kruger was quick to point this correlation out, noting the gargantuan gaps within the CME bitcoin futures charts:

These gaps are created when bitcoin, or any other asset for that matter, experience a rapid increase or decrease in price during a close of traditional trading hours.

Playing the Gap

Bitcoin has a particular penchant for creating these gaps. According to data relayed from June, in 2019 alone, bitcoin has generated ten of these gaps, with an average price difference of 4.6% from the close of the CME:

This has become such an accepted practice within the crypto markets that analysts have come to expect at least some price action around the various closes of the CME.

This action can be extrapolated further as the majority of gaps are eventually filled, leaving many to speculate on either a rise or fall for BTC based on the position of the previous gap.

Bitcoin Manipulation At Play?

Oddly enough, the opposite of this phenomenon has been noted around the expiration dates of CME bitcoin futures contracts. For example last week, BTC fell dramatically, citing a 7% drop from around $10200 to $9500. While Bitcoin is prone to volatility, this drop was significant in that it lined up with the expiry of the futures contracts.

Bitcoin (BTC) showing a 7% drop in the lead up to the CME bitcoin futures expiry date| Source: TradingView

This isn’t a first, either. A look at bitcoin price history around the time of the contract’s expiry reveals that an average 8% drop is typically in the week leading up to the expiration date.

Whether this is manipulation or simply a market phenomenon remains unclear; but one thing is certain, the CME provides much more insight into BTC’s price than people believe.

Last modified (UTC): September 4, 2019 13:39

Will Heasman @wjheasman

Will is a freelance journalist based in London, UK. He has been involved in the cryptocurrency industry for over 3 years, and fully believes in its capacity to change the world. Follow him on Twitter at wjheasman. Tips and PR: wjheasman@gmail.com