The price of the major cryptocurrency has been trading in a tight range between $16,000 and $17,000 for several days, signaling an impending renewed spike in volatility. Meanwhile, the all-time high in monthly bitcoin futures trading on the Chicago Mercantile Exchange indicates that institutions are increasingly willing to take a bearish stance, which could create an arbitrage opportunity.
- The risk of a domino effect of the cryptocurrency market is always present. Another failed entity turned out to be BlockFi, the situation of cryptocurrency exchange AAX is still uncertain.
- The number of active CME futures contracts jumped nearly 37% to 93,000 BTC in November, suggesting a huge influx of capital from the short-selling side of the cryptocurrency market.
- The buyback of 315,259 shares of the Grayscale Bitcoin Trust for the first time since July 2021, announced the ARK Invest fund managed by Cathie Wood. Offering record returns during the pandemic and focusing on innovative technologies, Cathie Wood’s ETFs have suffered huge losses as tech companies have declined.
The chart shows the average daily premium/discount of BTC futures contracts traded on the Chicago Stock Exchange. The record discount on futures indicates that large-cap commercial institutions are still confident of further declines. Source: Arcane Research
- Analysts say the number of bearish institutional positions in BTC futures on the Chicago stock exchange has caused a pullback, which is a situation where futures prices are trading below the spot price. CME monthly Bitcoin futures traded at an average daily discount of around 3.6% to the spot price last week, according to data from Arcane Research. This is larger than the discount seen during the March 2020 coronavirus-induced crash and the largest on record.
Morgan Stanley analysts invariably focus on the $13,000 level, which they believe is Bitcoin’s main support. Source: Bloomberg, Morgan Stanley
Bitcoin chart, H4 interval. The price of bitcoin is returning to the $16,500 area despite yesterday’s attempts to rise above $17,000. The intersection of the SMA200 and SMA50 averages, which technical analysis calls a “death cross”, signals a trend reversal. The main resistance continues to be the SMA50, which hovers around $17,000. Source: xStation5
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