Positive Signals from Bitcoin Futures. Late 2019 Pump Possible?

Posted | 10/12/2019 / Views | 6286
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Today we investigate a report which notes that the premium rates on Bitcoin futures have dramatically increased despite the price sliding the last couple weeks. We also discuss the cryptos tendency to stage a late Christmas-time rally.

 

 

Bitcoin has been on a steady decline over the last few weeks, with the price move erratically up to thousands of dollars in minutes. The bitcoin price is down almost half from its year-to-date highs, with the bitcoin and crypto market stuck on a downward trend since hitting its yearly highs, but with just a few weeks until Christmas and bitcoin bulls still upbeat, could we be in for Christmas rally?

"We will see $10,000 (US) bitcoin again and welcome $100,000 (US)," Ethereum co-founder and creator of Cardano, Charles Hoskinson, said last week, brushing off suggestion's bitcoin could be in terminal decline as so-called FUD

If bitcoin does stage a late-year pump, it wouldn't be the first-time crypto space has risen in December. Towards the end of 2013 bitcoin skyrocketed to what was an all-time high of over $1,000 US. A few years later, December 2017 saw bitcoin's epic bull run plateau at almost $20,000 US.

Furthermore, researchers have also noted "unusual" moves in the bitcoin futures market, with premiums rising even as the bitcoin price falls. This suggests that the bitcoin price could be headed higher soon - possibly next year.

From November 29 5o December 2, the premium on bitcoin futures extended over 30% while the bitcoin price sank around 6%.

"The premium rates on bitcoin March 2020 contracts have been increasing, although the bitcoin price has decreased," analysts at Arcane Research found, adding, "this is not a common observation."

Researchers also reported that bitcoin's volatility is set to rise to over 70% by June 2020, up from 55% currently.

"This clearly shows that traders anticipate changes in the bitcoin price. To put this in perspective, gold options for June 2020 trade with an implied volatility of 11.5%."

Positive Signals from Bitcoin Futures. Late 2019 Pump Possible?

Despite bitcoin's recent sell-off, HODLers are feeling good about next year and sentiment remains steady. A combination of high sentiment from bitcoin and crypto heavyweights (who have been predicting a sudden price surge), technical data is looking positive, and recent developments, suggest 2020 could be a big year for bitcoin.

Meanwhile, the looming bitcoin halving event, set for May next year, will see the number of bitcoins rewarded to miners cut by half and some expects this to boost the bitcoin price.