In the cryptocurrency market, traders are often reluctant to wait for "long enough" time to fill the spread.
In the past period, the trend of bitcoin and even the entire cryptocurrency market has been elusive, as if there are not too many rules to follow.
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Just after Bitcoin hit a high of $13,800, the market quickly fell to the $9,700 range. After a few weeks of sideways, it finally broke through the $10,000 resistance level. If you use Stephen Chow's movie lines to describe it, no doubt It’s “big and big, too fast, it’s too exciting!”
We have found that Bitcoin has been trying to break through the $11,000 resistance level in recent days, but it has repeatedly failed, so some analysts believe that Bitcoin may return to the $9,000 range. Their reasons seem to be very simple: due to CME Group There is a spread between futures and spot prices, so Bitcoin will continue to fall until it finds meaningful support until the spread is filled.
Bitcoin prices hovered around $11,000 due to rising selling pressure
The current price of Bitcoin around $12,000 is much lower than the initial $10,700 set by industry analysts. If we look at the bitcoin performance in the past week, we will find that the volatility is very obvious and the price has been Constantly adjusted below $11,000. More importantly, the rising parabolic pattern formed by Bitcoin's rise from $3,200 has been broken, which means that prices may fall further in the near future.
Jonny Moe, a cryptocurrency analyst, analyzed the parabolic pattern of Bitcoin's trend being broken:
What is the reason for the rebound? With the launch of the second half of this year, we may see further declines in the medium or long term.
In the above picture, we will find that the right-most upward parabola has been broken.
Bitcoin prices will continue to fall until the CME Group futures spreads are filled?
Before Starball was in the "Bitcoin price fluctuations that you thought, it was actually in the article "to make up the difference" for futures . Bitcoin and other cryptocurrencies are different from the traditional stock market. The former is open all year round. In the trading state, CME Group's bitcoin futures products only have five days of trading per week: starting from 5 pm every Sunday time in the US Central Time and ending at 4 pm every Friday. Due to the time interval between spot trading and futures trading, price differences will occur, and these spreads need to be “filled in” with spot prices.
Bitcoin trader Joe McCann believes that in many cases, the spread between futures prices and spot prices will continue to shrink until it finally disappears (because of short selling), but the rebound is higher. In traditional markets, “trading experts” (humans) deliberately do this because they usually manipulate market prices for their own benefit. As long as the futures price is long enough, the spread between it and the spot will eventually be filled. However, in the cryptocurrency market, traders are often reluctant to wait for "long enough" time to fill the spread, which seems to be one of the reasons for the frequent fluctuations in bitcoin prices.
For now, an important price level that traders and analysts are paying close attention to is $8,515, as this is the current price gap between Bitcoin and CME Group futures contracts.
Another popular cryptocurrency analyst, Chonis Trading, talked about the price gap in a recent tweet and pointed out that bitcoin did not form any futures gap this week, which means that the $8,515 futures spread gap is still not Fill (as shown below).
Although it is still unclear whether the key psychological price level of $10,000 will become a strong support area, once it falls below this level, the door of “further sharp decline” will be completely opened and then continue to the gap of the CME Group futures spread. Price.
At the time of this writing, Bitcoin prices were shown to be approximately $10,043.25 based on Coinmarketcap data, with a 24-hour drop of 5.29%.
This article comes from Newsbtc , the original author: Cole Peterson
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