Bitcoin Futures being a indicator within itself, although considered small in comparison to traditional futures, can predict trend reversals. Using three indicators:
Price (direction), Contract Volume (contracts traded within day increases pressure related to price direction) and Open Interest "OI" (contracts rolled over at end of day determine flow of revenue) as criteria become particularly useful as reversal signals.
We have had net-long positions (both early contracts and current, for those who expected price reversal) liquidated due to downward price trend and market uncertainty, this is displayed within both Cboe & CME. Onward from this we had an increase to contract volume & open interest as shorts were created now currently being covered as slight consolidation of both volume & open interest showing.
The pattern displayed is that of initial bottoming of price/volume/open interest, following the "flowchart" of futures indicates consolidation of all three indicators before a final direction is chosen being these three indicators are contained which provides large leeway either side. While futures are affected by technical analysis such as Flags, H&S, EMA, those are usually on smaller time spans and rely on previous data and a lot of the time are already priced into the futures created.
Looking at the CME Futures spread, overall the contracts are increasing hence the black upward trend which should be expected due to the limited time-span and nature of Bitcoin Futures, this should be taken into account when determining levels but should also be taken as positive when viewing Bitcoins future (as need both buyer/seller to create contract, spread hasn't changed much)
Quite interesting the US capital gains first quarterly tax is due around the April expiry of Cboe Futures.
Futures would indicate that the price range is bottoming with possibilities of most likely one more price drop before market rise, before US tax, Market rise after vol/OI consolidation or most unlikely, replay of net-longs being liquidated adding downward pressure to price to find a new bottom.
This being only an signal should be taken into account with others such as volume (Sigwit now implemented by major exchanges but volume level seems to indicate traders are selling to traders, Retail is needed for recovery) and the Trend Line & Weekly 50MA converging to add support to break $11500 major resistance, both of these are needed for overall trend reversal but with volume proceeding trend, Futures are starting to become effective indicator for when large flow of money initiates.
www.cftc.gov/dea/options/deacboesof.htm
www.cmegroup.com/tra...otes_volume_voi.html
BTC is seeing some tough times , so I should write this:
***Education Purposes only***
Price (direction), Contract Volume (contracts traded within day increases pressure related to price direction) and Open Interest "OI" (contracts rolled over at end of day determine flow of revenue) as criteria become particularly useful as reversal signals.
We have had net-long positions (both early contracts and current, for those who expected price reversal) liquidated due to downward price trend and market uncertainty, this is displayed within both Cboe & CME. Onward from this we had an increase to contract volume & open interest as shorts were created now currently being covered as slight consolidation of both volume & open interest showing.
The pattern displayed is that of initial bottoming of price/volume/open interest, following the "flowchart" of futures indicates consolidation of all three indicators before a final direction is chosen being these three indicators are contained which provides large leeway either side. While futures are affected by technical analysis such as Flags, H&S, EMA, those are usually on smaller time spans and rely on previous data and a lot of the time are already priced into the futures created.
Looking at the CME Futures spread, overall the contracts are increasing hence the black upward trend which should be expected due to the limited time-span and nature of Bitcoin Futures, this should be taken into account when determining levels but should also be taken as positive when viewing Bitcoins future (as need both buyer/seller to create contract, spread hasn't changed much)
Quite interesting the US capital gains first quarterly tax is due around the April expiry of Cboe Futures.
Futures would indicate that the price range is bottoming with possibilities of most likely one more price drop before market rise, before US tax, Market rise after vol/OI consolidation or most unlikely, replay of net-longs being liquidated adding downward pressure to price to find a new bottom.
This being only an signal should be taken into account with others such as volume (Sigwit now implemented by major exchanges but volume level seems to indicate traders are selling to traders, Retail is needed for recovery) and the Trend Line & Weekly 50MA converging to add support to break $11500 major resistance, both of these are needed for overall trend reversal but with volume proceeding trend, Futures are starting to become effective indicator for when large flow of money initiates.
www.cftc.gov/dea/options/deacboesof.htm
www.cmegroup.com/tra...otes_volume_voi.html
BTC is seeing some tough times , so I should write this:
***Education Purposes only***
Comment:
With Possibilities, I was a bit vague so here is flowchart to follow with Price Volume Open Interest
