The open curiosity in CME Bitcoin Futures contract hit a file excessive final Friday.
The whole determine of 5,190 for the interval between Might 27 to June three represents the most important variety of open curiosity, or contracts excellent, in CME bitcoin futures ever and a 7 p.c acquire on the week prior, in accordance to knowledge from the Commodity Futures Buying and selling Fee.
Might 31 marked the final day of buying and selling on the CME futures markets earlier than contract settlements, that are set to happen on the finish of right this moment’s (June three) buying and selling session.
The sharp rise within the futures buying and selling exercise might be an indication of elevated institutional participation within the cryptocurrency markets. It’s price noting that futures had been listed on the CME on the peak of the bull market in December 2017. The futures buying and selling exercise, nonetheless, remained uninteresting all through 2018, courtesy of the bear market.
CME Futures Market – Day by day Snapshot
As seen beforehand, bitcoin futures often “fill” a spot created by the shut of the buying and selling interval on the finish of the week with a resumption of commerce on the next Monday. Massive demand in futures contracts often creates larger gaps (from the time of near a brand new open for the week), thereby risking larger draw down as soon as costs right.
The gaps proven on the CME bitcoin futures each day chart for Might 17 and Might 31 present a very good instance of this.
On Might 17 the spot worth of bitcoin dropped to as little as $6,600 earlier than larger shopping for strain pushed costs again above $7,300, finishing the 11.74 p.c hole left within the futures market 4 days prior.
Once more on Might 31, after climbing to as excessive as $9,090 on the Coinbase alternate, BTC’s worth retraced 11 p.c beneath $eight,000 earlier than resuming its bullish pattern, pushing again above $eight,200 an hour later and finishing the 5.5 p.c hole left within the futures market, once more, 4 days prior.
Lastly, the most recent $145 hole left from yesterday’s shut and right this moment’s open created the likelihood for a correction to roughly $eight,595, which got here in to impact early this morning as bitcoin’s worth fell beneath $eight,400 on most exchanges.
Information from the CFTC additionally confirmed open curiosity in brief positions sat at 85.1 p.c in comparison with 62.9 p.c for bitcoin longs, hinting at a worth pullback within the short-term as traders facet with the likelihood for a downward transfer in its worth.
Disclosure: The writer holds no cryptocurrency on the time of writing
Bitcoin picture through Shutterstock; charts through Buying and selling View