Bitcoin (BTC) has dropped down about 5 percent at $7,868 which has been triggered by the expiry of Bitcoin futures today. With the opportunity to short prices, bears seem to speculate as expected.
However, this fall is offering the perfect opportunity to the investors to buy the dip before, as predicted by analysts bitcoin bull rally takes full charge.
Bitcoin futures by CME expires, BTC price falls as expected
Today is the day when the Bitcoin futures by Chicago Mercantile Exchange (CME) expires. The derivatives giant, CME group allows the professional and institutional traders to long or short on Bitcoin. Earlier this week, CME has reported that Bitcoin futures have hit the record volume as the bitcoin bull rally went on full force. This all-time record was 12,878 contracts that amounted to about $530 million at that time.
As always happens, whenever bitcoin futures expiration date comes into action, the price of bitcoin take a drop of about 6 to 8 percent. Though the anticipation of expiration date starts affecting the bitcoin price days prior the final day, this time the prices took a hit today.
Since last week, the Bitcoin price has been on a constant upward movement. It crossed the $8,000 level first time in two months and recorded highest BTC dominance of this week. However, today, Bitcoin price started its downward slide and dropped below the $8k mark. At the time of writing, it has been trading at $7,868.
Short the market, bears get to speculate
The drop in bitcoin price has been attributed to the rejection of Winklevoss’s Bitcoin ETF second time by SEC. But, looks like the Bitcoin futures expiration date finally caught up today. Usually,bitcoin futures’ expiration starts triggering the price drop about five days in advance. But this time as bulls were fully charged and the price didn’t reflect any changes, it has been expected that the price might not get affected after all.
But today, bitcoin dropped down approximately 4.22 percent and altcoins took a slip as well in tandem with bitcoin. Past data has suggested a healthy pullback in bitcoin prices. So, the prices can be expected to further fall down.
Before Bitcoin futures have been introduced, investors didn’t have the option to short the market. So, despite the market being in a healthy position with increased adoption and prices surging, futures gave bears the opportunity to speculate and affect the prices.
No new crypto futures contract, says CME CEO
CME first launched the bitcoin futures contract on its platform after its competitor Cboe introduced the product. Now, Terry Duffy, the CEO of CME as reported by Bloomberg, won’t be making any additions to the crypto futures market any time soon.
“I will not just put products up there to see where they’re going to go. I will take a wait and see approach with Bitcoin for now.”
As for the bitcoin futures volume, he shared
“We’re not seeing huge flows regardless and that’s OK. This is going to take some time one way or another and we’ll do it the right way.”
Bitcoin is currently down which is being seen as the perfect opportunity to buy the dip as investors and analysts all are expecting it to hit new highs soon.