Get started

Bitcoinfutures

Decoding the BTC-ES Correlation During FOMC Meetings1. Introduction The Federal Open Market Committee (FOMC) meetings are pivotal events that significantly impact global financial markets. Traders across asset classes closely monitor these meetings for insights into the Federal Reserve’s stance on monetary policy, interest rates, and economic outlook. In this article, we delve into the correlation between Bitcoin futures (BTC) and E-mini S&P 500 futures (ES) during FOMC meetings. Focusing on the window from one day prior to one day after each meeting, our findings reveal that BTC and ES exhibit a positive correlation 63% of the time. This relationship offers valuable insights for traders navigating these volatile periods. 2. The Significance of Correlations in Market Analysis Correlation is a vital tool in market analysis, representing the relationship between two assets. A positive correlation indicates that two assets move in the same direction, while a negative correlation implies they move in opposite directions. BTC and ES are particularly intriguing to study due to their distinct market segments—cryptocurrency and traditional equities. Observing how these two assets interact during FOMC meetings provides a window into macroeconomic forces that affect both markets. The key finding: BTC and ES are positively correlated 63% of the time around FOMC meetings. This suggests that, despite their differences, both markets often react similarly to macroeconomic developments during these critical periods. 3. Methodology and Data Overview To analyze the BTC-ES correlation, we focused on a specific timeframe: one day before to one day after each FOMC meeting. Daily closing prices for both assets were used to calculate correlations, providing a clear view of their relationship during these events. The analysis includes data from multiple FOMC meetings spanning several years. The accompanying charts—such as the correlation heatmap, table of BTC-ES correlations, and line chart—help visualize these findings, highlighting the periods of positive and negative correlation. Contract Specifications: o E-mini S&P 500 Futures (ES): Contract Size: $50 x S&P 500 Index. Minimum Tick: 0.25 points, equivalent to $12.50. Initial Margin Requirement: Approximately $15,500 (subject to change). o Bitcoin Futures (BTC): Contract Size: 5 Bitcoin. Minimum Tick: $5 per Bitcoin, equivalent to $25 per tick. Initial Margin Requirement: Approximately $112,000 (subject to change). These specifications highlight the differences in notional value and margin requirements, underscoring the distinct characteristics of each contract. 4. Findings: BTC and ES Correlations During FOMC Meetings The analysis reveals several noteworthy trends: Positive Correlations (63% of the time): During these periods, BTC and ES tend to move in the same direction, reflecting shared sensitivity to macroeconomic themes such as interest rate adjustments or economic projections. Negative Correlations: These occur sporadically, suggesting that, in certain scenarios, BTC and ES respond differently to FOMC announcements. 5. Interpretation: Why Do BTC and ES Correlate? The observed correlation between Bitcoin futures (BTC) and E-mini S&P 500 futures (ES) around FOMC meetings can be attributed to several factors: Macro Sensitivity: Both BTC and ES are heavily influenced by macroeconomic variables such as interest rate decisions, inflation expectations, and liquidity changes. The FOMC meetings, being central to these narratives, often create synchronized market reactions. Institutional Adoption: The increasing participation of institutional investors in Bitcoin trading aligns its performance more closely with traditional risk assets like equities. This is evident during FOMC events, where institutional sentiment towards risk assets tends to align. Market Liquidity: FOMC meetings often drive liquidity shifts across asset classes. This can lead to aligned movement in BTC and ES as traders adjust their portfolios in response to policy announcements. This correlation provides traders with actionable insights into how these assets might react during future FOMC windows. 6. Forward-Looking Implications Understanding the historical correlation between BTC and ES during FOMC meetings offers a strategic edge for traders: Hedging Opportunities: Traders can use the BTC-ES relationship to construct hedging strategies, such as using one asset to offset potential adverse moves in the other. Volatility Exploitation: Positive correlation periods may signal opportunities for trend-following strategies, while negative correlation phases could favor pairs trading strategies. Risk-On/Risk-Off Cues: The alignment or divergence of BTC and ES can act as a barometer for market-wide sentiment, aiding decision-making in other correlated assets. Future FOMC events could present similar dynamics, and traders can leverage this data to refine their approach. 7. Risk Management Considerations While correlations provide valuable insights, they are not guaranteed to persist. Effective risk management is crucial, particularly during volatile periods like FOMC meetings: Stop-Loss Orders: Ensure every trade is equipped with a stop-loss to cap potential losses. Position Sizing: Adjust position sizes based on volatility and margin requirements for BTC and ES. Diversification: Avoid over-concentration in highly correlated assets to reduce portfolio risk. Monitoring Correlations: Regularly assess whether the BTC-ES correlation holds true during future events, as changing market conditions could alter these relationships. A disciplined approach to risk management enhances the probability of navigating FOMC volatility successfully. 8. Conclusion The correlation between Bitcoin futures (BTC) and E-mini S&P 500 futures (ES) around FOMC meetings highlights the interconnected nature of modern financial markets. With 63% of these events showing positive correlation, traders can glean actionable insights into how these assets react to macroeconomic shifts. While the relationship between BTC and ES may fluctuate, understanding its drivers and implications equips traders with tools to navigate market volatility effectively. By combining historical analysis with proactive risk management, traders can make informed decisions during future FOMC windows. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME_MINI:ES1!Education
by traddictiv
Bitcoin Futures Confirming 3 Drives of Bearish Divergence In the recent analysis of futures on the daily timeframe, a technical pattern known as the "3 Drives of Divergence" has been confirmed, signaling a potential trend reversal. This pattern, often associated with strong bearish momentum, has been observed with a divergence in the Relative Strength Index (RSI), further supporting the bearish outlook. RSI Divergence: The RSI, a momentum oscillator, shows a bearish divergence where the price makes higher highs, but the RSI makes lower highs. This is a classic sign of weakening upward momentum, often preceding a price decline. Key Levels: Reversal Pivot: If the price closes below 97K on a daily timeframe. This pivot is critical as it is the last resistance before a potential downtrend. Target Futures Gap Fill: Historical price action suggests a gap in the futures market that might get filled. This target zone, marked on the chart, could act as a price magnet for Bitcoin if bearish pressures continue.
CME:BTC1!Short
by RSI_Trading_Concepts
BTC Futures Expectations: Anticipating the Next Market MovesTwo major macro events are now behind us; the Fed rate decision and more notably, the U.S. Presidential Election. With a clean red sweep, we have begun to see Scenario 1 play out from our previous post. However, given the surge of retail euphoria and excitement, this run towards the 90k mark was not entirely unexpected. November 11, 2024 has now set a crucial range for the weeks ahead. Big Picture BTC Futures: Key Levels to Watch: pATH support: 78,960 - 77,155 Key Bull Zone: 68,100 - 65,500 Yearly Mid: 67,375 Yearly VPOC: 68,100 Scenario 1 — Consolidation While Capped by Weekly High and Monday’s Range In this scenario, we can expect further consolidation as more participants enter the market. Based on our current expectations, BTC may consolidate near new ATHs and above key pATHs support. Perhaps we may see another bull flag formation, which may fail at first and test the key pATHs support before another upward move. Here, the key would be shaking out late breakout traders, with a possible dip before another move higher as outlined. Scenario 2 — Euphoria Turns to Frustration and Shakeout for Late Breakout Traders In this scenario, we expect a deeper pullback that could be more intense—shifting the euphoria into gloom. A bottom signal will likely emerge as market sentiment turns bearish. BTC futures could dip back to pATHs, followed by a quick V bottom recovery that tests the confluence of yVPOC, key bull support, and yearly midpoint. Scenario 3 - Sustained Bullish Momentum to 100K In this scenario, a bullish run continues towards the 100K mark before it starts to cool down and consolidate between 90K and 100K price levels. This is a warning for those trying to time a top in BTC futures. It is better to plan than to step in blindly and fire from the hip. Considering trading CME BTC futures? You can now access CME MBT Micro Bitcoin futures, 1/10th the size of one bitcoin, and CME BFF, Bitcoin Friday futures, sized at 1/50 of a bitcoin, Bitcoin Friday futures is a short-dated contract that provides an accessible, capital-efficient way to manage your bitcoin trading strategies. Disclaimer: The views expressed are personal opinions and should not be interpreted as financial advice. NFA does not have regulatory oversight authority over underlying or spot virtual currency products. Derivatives involve a substantial risk of loss and are not suitable for all investors.
CME:BTC1!
by EdgeClear
Bitcoin | In Satoshi V Trust Gentlemen welcome to BULL MARKET The price of Bitcoin is $28,280 today with a 24hour trading volume of 45 billion dollars This represents a 4% price increase in the last 24 hours and a 40% price increase in the past 7 days When iconic US investment bank Lehman Brothers Holdings Inc. filed for bankruptcy in 2008, it shook people’s faith in banks so much that a new class of asset, which did not have the backing of any formal bank, came into being. Bitcoin, the most popular cryptocurrency, first found a mention in November 2008, about two months after the Lehman crisis. A decade later, cryptocurrencies have become one of the most debated financial assets, globally and in India, in terms of risk and returns. now in 2023 Banks fails even bigger and bitcoin is here to shine Right now all big companies including Amazon, Microsoft, BlackRock, BridgeWater ... got an eye on crypto and buying the dip while the old banking system shows its flaws all indicators sending bullish signal and be ready for 28500, 28700 and 28900$
Long
by moonypto
12
Bitcoin is going to the moon! [S3]Signal #3 for my new signal series. Bitcoin is extremely bullish right now and parabolic, its been bullish for a while now but the momentum remains strong and lots of bull flags remain positive. ---------------------------------------------------------------------------------------------- ***ALL ANALYSIS, SIGNALS, AND ANY CONTENT IS FOR EDUCATIONAL PURPOSES ONLY AND ARE NOT MEANT TO BE PROFITED OFF.*** ---------------------------------------------------------------------------------------------- Like I stated in my first signal, I will not be going in big depth on the TA for the signal posts I make, I will make educational posts going more in depth on that soon though. This post is mainly based on price action, momentum, and some indicators of mine. Entry: $79,200-$80,000 Targets: TP1: $82,742 TP2: $85,132 TP3: $82,742 Stop Loss: $74,305 ---------------------------------------------------------------------------------------------- ***ALL ANALYSIS, SIGNALS, AND ANY CONTENT IS FOR EDUCATIONAL PURPOSES ONLY AND ARE NOT MEANT TO BE PROFITED OFF.*** ----------------------------------------------------------------------------------------------
Long
by MarketAnalyzerFX
1
BTC IN UP MOVEMENT + TRADE PLANTrend Identification: Descending Channel: Bitcoin is currently in a descending parallel channel after an uptrend, indicating a potential bullish continuation if it breaks out of this channel. Previous Uptrend: The price came from an uptrend, and descending channels often serve as continuation patterns, suggesting a higher probability of an upward breakout. Key Support and Resistance Levels: Support Levels: $68,556.87: Major support near the recent low in the channel. $66,333.98: Secondary support zone that could act as a cushion in case of a downside move. $64,591.15: Historical support level providing a safety net if the price dips further. Resistance Levels: $72,198.87: Immediate resistance that BTC needs to overcome for a continued uptrend. $73,655.67: Key resistance area that, if broken, could trigger a strong bullish move. Indicators Analysis: RSI (Relative Strength Index): The RSI is close to the midpoint, indicating a neutral zone. However, an upward movement in RSI could signal increasing bullish momentum. Stochastic RSI: Currently near the overbought zone. It indicates potential upward pressure, but caution is needed as it may signal short-term exhaustion. Volume: Noticeable increase in volume around the support levels, indicating buying interest. Volume confirmation on breakout above the resistance line would strengthen the bullish case. Moving Averages: HMA (Hull Moving Average): Showing a slight upward trend, aligning with the potential breakout from the descending channel. Trading Plan Entry Strategy: Aggressive Entry: Enter a long position upon the breakout of the descending channel, ideally with a confirmed volume increase above $72,198.87. This would signal a possible continuation of the previous uptrend. Conservative Entry: Wait for a confirmed breakout and retest of the $72,198.87 level. If the price holds above this level after retesting, it indicates stronger bullish confirmation. Stop Loss: Place a stop loss slightly below $68,556.87 to limit downside risk. This area aligns with recent support, and a drop below it may indicate invalidation of the breakout pattern. Take Profit Levels: Primary Target: $73,655.67 (first resistance level). Partial profits can be taken here to lock in gains. Secondary Target: $76,000, if Bitcoin gains strong momentum after breaking through the primary target. This level could be achieved in a continued bullish scenario. Final Target: $80,000 as a psychological target, if there is sustained bullish momentum and no major resistance above. Risk Management: Position Size: Limit the position size to manage risk exposure, especially with the potential volatility in cryptocurrency markets. Trailing Stop: Consider using a trailing stop after reaching the first target to lock in profits while allowing for potential upside. Monitoring Indicators: Volume: Continuously monitor the volume as the price approaches resistance zones. Higher-than-average volume would support the breakout, whereas weak volume could lead to a false breakout. RSI and Stochastic: Keep an eye on these momentum indicators. If the RSI and Stochastic enter overbought territory and start to diverge, it could signal a potential reversal. Timeframe: This setup appears on a 4-hour chart, suggesting a medium-term trading perspective. Reassess positions if the breakout fails to materialize within the next few days.
Long
by elfabiiani
1
BITCOIN is the KING and upward movement is highly expected!Technical analysis and trade plan by Blaž Fabjan Support and Resistance Levels: Resistance Levels: 72,198.87 USDT 68,556.87 USDT 64,591.15 USDT Support Levels: 66,333.98 USDT 61,758.48 USDT 60,301.68 USDT 56,902.49 USDT The key levels indicate potential areas where price action could face resistance or find support, which might serve as entry or exit points. Indicators: Wave Cipher Divergences: Wave Cipher shows divergences suggesting a possible upward momentum. Positive divergences with green dots could imply bullish continuation. Relative Strength Index (RSI): RSI currently reads 55.19, indicating a neutral zone, leaning slightly bullish if it moves towards 60. This suggests Bitcoin isn't overbought or oversold and could continue a gradual trend. Stochastic Oscillator: The Stochastic shows a value around 70.52, close to the overbought region (above 80). If it breaks further upward, it may signal an overbought state, potentially leading to a correction. Hull Moving Average (HMA): HMA appears to trend slightly downwards, showing a bearish trend in the short term. The value of -6.58 indicates a bearish momentum, which may warn of a potential short-term pullback before any significant uptrend resumes. Price Action: The chart shows a potential breakout attempt around the 66,333.98 USDT level, where price action previously tested and retraced. A consolidation near this level could suggest that bulls are preparing for an upward push, especially if price breaks above 68,556.87 USDT. Volume Analysis: Volume shows a steady, moderate increase, supporting the upward trend. This moderate volume increase without large spikes could imply gradual accumulation rather than distribution. Trading Plan Long Position (Bullish Scenario) Entry: Consider entering a long position if the price breaks and holds above the 68,556.87 USDT resistance level with volume confirmation. Stop Loss: Set a stop loss slightly below the 66,333.98 USDT support level to mitigate risk in case of a false breakout. Targets: Target 1: 72,198.87 USDT — aligns with a strong resistance level and provides a conservative target. Target 2: 75,553.67 USDT — the next significant resistance level, offering a favorable risk-to-reward ratio. Short Position (Bearish Scenario) Entry: Consider shorting if the price fails to hold above 66,333.98 USDT and shows bearish confirmation, such as a breakdown with high volume. Stop Loss: Set a stop loss above 68,556.87 USDT to avoid risks from potential false breakdowns. Targets: Target 1: 61,758.48 USDT — a nearby support level that provides a logical take-profit point. Target 2: 60,301.68 USDT — serves as a secondary target if the bearish trend strengthens. Risk Management: Given the proximity to resistance and support levels, using a risk/reward ratio of 1:2 or higher is advisable to maintain favorable trade setups. Monitor Divergences: Keep an eye on divergences in the Wave Cipher, RSI, and Stochastic Oscillator for potential trend reversals or continuations. News and Market Sentiment: Be mindful of broader market sentiment and news events, as these can influence Bitcoin's price behavior, particularly near key levels. This trading plan provides a structured approach to capitalize on potential breakouts or breakdowns, balancing both bullish and bearish scenarios.
Long
by elfabiiani
1
BITCOIN ULTIMATE PARABOLIC CURVE CHART | Insane $181,267 Target!🟢 Hello, fellow traders! I’m excited to share an update on Bitcoin price prediction and the potential implications of the Parabolic Curve pattern we witnessing at the moment! Today, let’s dive into the Parabolic Curve as Bitcoin approached the end point of Base 4. Understanding this pattern can help us evaluate future trading opportunities. The Parabolic Curve often surfaces near the culmination of major market surges, marking the end result of multiple base formation breaks. This pattern is typically seen in growth assets with innovative technology or visionary leadership — Bitcoin is a prime example. Last year, at the pivotal point of Base 3 , indicated by the "X" on the chart at $25,700 , Bitcoin doubled in a remarkably short timeframe. The hallmark of this pattern was its staircase-like formation, where the price created short-term bases before catapulting to new highs, repeating this cycle multiple times during its ascent. In my analysis using Fibonacci tools and Elliott Waves , I've observed that: Base 4 in the range between the $72,759 resistance and $55,257 support , with lowest spike at $49,000 . The anticipated sell zone for the parabolic move was positioned between $149,175 and $181,267 . This parabolic curve, reminiscent of a rocket's trajectory, has demonstrated significant persistence. However, as we saw, caution is a key as this pattern near completion; rapid upward momentum can conclude abruptly, resulting in price declines that outpace previous gains. What are your thoughts on Bitcoin's recent movements? Did you spot the Parabolic Curve unfolding as anticipated? Share your insights in the comments below — I’d love to hear your perspective! Your support means the world to me, so if you found this analysis valuable, please smash that like button and follow for more insights!
Long
by ArShevelev
33
Extracting Arbitrage Yields In Bitcoin Carry TradeBitcoin is known as digital gold. It is treasured as an investment asset. Much like the famous yellow metal, bitcoin (“BTC”) does not offer income through dividends or interest. This poses a challenge for investors seeking regular cashflows and income. One strategy that skilled investors use to turn BTC into an income generating asset is the cash and carry trade (“carry trade”). This paper describes mechanics of carry trade and the attendant risks. It also highlights that the introduction of spot ETFs has created a secure infrastructure for harvesting carry yields using a regulated platforms such as the CME. INTRODUCTION TO THE CARRY TRADE The carry trade is an arbitrage strategy that benefits from the differences in futures and spot price of an asset. It is a delta neutral strategy. In other words, the returns are not price dependent once the carry trade is profitably set up. To illustrate, consider the forward curve of CME Bitcoin futures which shows futures prices at different expiries. Bitcoin futures with later expiries trade at a premium to near term ones and this type of market structure is referred to as contango. In a trade that involves simultaneous acquisition of BTC and selling a BTC futures contract expiring later, investors can lock in the price difference as profits. Once established, this trade’s profit is unaffected by price moves enabling investors to harvest carry yield at the futures expiry. The pay-off from this trade is driven by convergence of futures and spot prices. Convergence is the movement of a futures price closer to spot price at expiry. Once futures and spot price are sufficiently close, the trade can be unwound by simultaneously exiting both positions. For CME Bitcoin and Micro Bitcoin futures, convergence occurs because the futures contracts settle to a robust price benchmark known as the CF Bitcoin Reference Rate (“BRR”) which includes price quotes from major crypto exchanges. BTC FUTURES CONTANGO TERM STRUCTURE AND PREVALANCE OF CARRY TRADE Carry trades can be executed in both contango and backwardation term structures. While the carry trade can technically be executed in backwardation (where later expiries are cheaper), doing so involves high borrowing costs for the short spot leg. Hence, BTC’s contango term structure is beneficial for extracting arbitrage yields from carry trade. Factors driving BTC contango term structure are multi-faceted. Simply put, during bull runs, investors anticipate higher prices for contracts maturing later. Furthermore, high demand for spot BTC and limited availability on the sell-side can exacerbate forward premiums. Additional factors resulting in contango include cost of funds, insurance premiums, and custodial charges that are higher for later expiries, and a convenience yield of holding BTC. Convenience yield represents returns from holding BTC through activities such as lending. BTC futures term structure has shown both contango and backwardation during different periods. Current term structure indicates bullish sentiment fuelled by spot BTC approval in January and the next halving event expected in April. Term structure shifts can result in outsized returns at times. Notably, the switch from contango to backwardation can offer outsized returns on the carry trade, exceeding the difference between futures and spot price as observed at trade inception. The carry trade has been a popular strategy, especially during periods of significant volatility and during bull markets when BTC contango structure widens. Even sell-offs provide compelling trading opportunities as the carry trade is directionally neutral. Carry trades have lower risk relative to an outright long position. For reference , during 2021, LedgerPrime’s quant fund was able to beat BTC returns using, among others, the carry trade during a large selloff. RISKS OF THE CARRY TRADE The carry trade neutralises market risk but is still subject to counterparty risks and liquidity risks when spreads diverge and tear. Largest risk factors associated with the carry trade is the counterparty risk . While CME futures are regulated by the CFTC, spot crypto exchanges are not subject to similar regulations. This poses significant risk for investors if they opt to hold their BTC on such unregulated exchanges. Such risks arising from trading on unregulated platforms is most exemplified by the collapse of FTX. FTX was a popular exchange for executing carry trades as it offered dated futures, perps, and spot BTC on its platform. The dramatic collapse of FTX highlighted counterparty risk as a major concern. Self-custody of spot BTC has its own risks including transfer costs and cybersecurity risks. Another risk factor is early liquidation. As the futures leg of the trade is a short position, where prices rally sharply, the short position may be at risk of liquidation despite a proportional gain on the long leg of the carry trade. SPOT BTC ETF HELPS REDUCE COUNTERPARTY RISKS The rollout of spot BTC ETFs reduces counterparty risk. Unlike unregulated crypto exchanges, spot ETFs are regulated by the SEC, listed on regulated exchanges with investor protection. With both the futures and spot leg now available through regulated platforms, investors have access to secure infrastructure for executing the carry trade. The table below provides details of approved spot ETFs including AUM, expense ratio, and the benchmark index. Carry trade using spot ETFs with CME CF Bitcoin Reference Rate (CME BRR) enables greater precision in extracting arbitrage yields. Seven of the eleven approved spot BTC ETFs use the CME BRR. Still, there are downside to using spot ETFs for long BTC exposure in carry trades. For one, ETFs are only tradeable during market hours (9:30AM to 4:00PM US Eastern Time not including extended trading hours) whereas cryptocurrency exchanges and even CME futures trade for longer hours. Moreover, expense ratios and premium/discount to NAV for ETFs will erode already thin profits. Spot BTC ETFs are currently offering discounts on expense ratio for a fixed period. CARRY TRADE ILLUSTRATION To illustrate a hypothetical carry trade, consider the following setup comprising long BITB ETF and short CME Bitcoin futures (BTCH2024). BITB references the same CME CF Bitcoin Reference Rate as CME futures and its premium/discount of -0.07% (as of 09/Feb) offers a beneficial entry point for this trade. Moreover, the premium/discount on the ETF has been tight. Source: Bitwise The premium for MBTH2024 over spot reference rate as of close on 9/Feb was 2.83%. Taking seven basis point discount to NAV, this results in total return of 2.90% over 48 days resulting in an annualized arbitrage return of 22%. As the trade is required to be directionally neutral, notional value on both legs needs to be balanced. CME Micro Bitcoin futures (“MBT”) offers exposure to 0.1 BTC. Notional on short BTCH2024 futures leg: 0.1 BTC As of close 09/Feb, BITB market price: USD 25.95 CME CF Benchmark BTC price: USD 47,614 Each share of BITB offers exposure to 0.000545 BTC 184 shares of BITB provide exposure to 0.000545 x 184 = 0.100280 BTC The payoff from the trade consisting of 184 x long BITB and 1 x short MBTH2024 would be 2.9% of notional value = 2.9% x (0.1 x 47,614 USD/BTC) = USD 138. The trade requires margin of USD 980 on the short futures leg and notional of USD 4,775 on the long leg for a total capital requirement of USD 5,755 (as of Feb 2023) which translates into ROI of 2.4%. Still, as mentioned, liquidation risk remains a concern. Hence, it is prudent to maintain higher margin on the short futures leg which would lower the ROI. Note that timing this trade better can improve the odds and in case Bitcoin’s term structure switches from contango to backwardation, payoff would be higher. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
CME:BTC2!Education
by mintdotfinance
Insights into Bitcoin Futures as 2024 brings new regulations inIntroduction to Bitcoin Futures Bitcoin Futures represent a significant intersection of traditional financial markets and the innovative world of cryptocurrencies. They allow traders to speculate on the future price of Bitcoin, providing a way to hedge against price volatility or to profit from price movements. As we step into 2024, the potential approval of spot Bitcoin ETFs is poised to further transform the landscape for Bitcoin Futures. The Impact of Spot Bitcoin ETF Approval Spot Bitcoin ETFs are directly tied to the current price of Bitcoin (spot price). Their likely potential approval by U.S. regulators could have substantial implications for the Bitcoin market. Firstly, it's expected to increase market liquidity by providing an accessible avenue for traditional investors to enter the cryptocurrency space. Secondly, it could lead to greater price stability and potentially higher prices due to increased demand. However, it's also important to consider the potential risks, such as amplified market reactions to regulatory news and changes in the underlying asset. Parallel Analysis of Other ETFs To understand the potential impact of a Bitcoin ETF, it's instructive to look at the introduction of other commodity and currency-based ETFs: GLD (Gold ETF): Following the introduction of GLD, which is linked to COMEX Gold Futures (GC), the gold market saw increased liquidity and interest from new investor segments, contributing to significant price rallies. GLD Performance Chart SLV (Silver ETF): Similar to GLD, the introduction of SLV, linked to COMEX Silver Futures (SI), led to increased investor participation and price movements in the silver market. SLV Performance Chart FXE (Euro ETF): Linked to CME Euro Futures, FXE provided investors an easy way to gain exposure to euro currency movements, affecting trading volumes and price volatility. FXE Performance Chart USO (WTI Crude Oil ETF): Tied to NYMEX WTI Crude Oil Futures, USO's introduction affected the oil market by providing more access and potentially contributing to price movements during significant market events. USO Performance Chart Historical Implications for Bitcoin The history of these ETFs suggests a pattern: the introduction of an ETF could lead to increased market participation and, often, significant price movements. For Bitcoin, the approval of a spot ETF could similarly increase market participation and price volatility, at least in the short term. Over the long term, it could help stabilize and mature the market as more institutional investors get involved. Forward-Looking Insights Given the potential approval of spot Bitcoin ETFs, traders and investors in Bitcoin Futures might expect several scenarios. An immediate increase in volatility could be likely as the market adjusts to the influx of new participants. Over time, we might see a more liquid and stable Bitcoin market. Planning for a Risk-Defined BTC Opportunity: Risk Management : Experienced traders prioritize risk management. Using stop-loss orders or hedging techniques is imperative to avoid undefined risk exposure. Precision in Entries and Exits : Aligning entries and exits with relevant market price levels can help manage risk. When a price point generates a bounce, the trader stays in the trade; if a price level is violated, the disciplined action is to exit the trade promptly for a predetermined loss. Relevant Price Levels for BTC : Currently, BTC shows relevant resistance levels starting at 51,585 and support between 39,640-34,295. Proposed Trade Plan: ENTRY: 39,640 STOP-LOSS: 34,295 TAKE PROFIT TARGET: 51,585 This trade plan offers a 2.23 Reward-To-Risk ratio, providing a structured approach to capitalizing on potential market movements. In order to manage risk and use the right contract size, traders need to take into consideration the Point Value for BTC Futures being $25 per point. Traders should prepare for both the opportunities and risks this change could bring, considering strategies that allow flexibility and risk management. Conclusion The potential approval of spot Bitcoin ETFs in 2024 is set to make waves in the Bitcoin Futures market. Drawing parallels from the history of other ETFs, we anticipate increased market participation and potential price movements. As we navigate this evolving landscape, staying informed and adaptable will be key to capitalizing on the opportunities and navigating the challenges ahead. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes, forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME:BTC1!
by traddictiv
Bitcoin Futures: A Quantitative Approach to Analyzing BTCIntroduction to Bitcoin Futures Bitcoin, the pioneering digital asset, has carved a niche in the financial markets with its futures contracts. Bitcoin Futures provide traders and investors a regulated avenue to speculate on the price of Bitcoin without holding the actual cryptocurrency. This article delves into a quantitative analysis to analyze the next week's potential value of Bitcoin Futures, employing a sophisticated Neural Network model. Current Market Landscape The Bitcoin market is known for its rapid price movements. Recently, regulatory news, technological advancements, and shifts in investor sentiment have contributed to market fluctuations. Understanding these trends is crucial for traders looking to navigate this dynamic landscape. Quantitative Analysis of BTC Futures' Potential Price Movements Neural Networks & Machine Learning: At the heart of our quantitative approach is a Neural Network model. This model has been trained on historical weekly data of Bitcoin Futures, including key price points and other relevant market indicators. Data Preprocessing: To ensure accuracy, the data underwent rigorous preprocessing, including normalization to make it suitable for the Neural Network. This step is essential in highlighting the true patterns and trends in the data without noise or scale issues distorting the model's view. Model Training: Our model was trained over 500 iterations, adjusting its internal parameters to minimize prediction error. This training process involved feeding the model historical data and letting it learn from the actual price movements. Evaluation and Prediction: After training, the model's performance was evaluated. The actual prices were compared against the model's predictions to assess robustness. This evaluation is crucial in understanding the model's reliability. Impact of External Factors Bitcoin Futures are affected by a range of external factors, including regulatory changes, market sentiment, and technological developments. These factors can cause sudden and unpredictable market movements, making the analysis of future potential prices challenging. Our model takes into account the historical impact of these factors, but it's important to remember that unforeseen future events can lead to deviations from predicted values. Forward-Looking Market Views Based on our Neural Network's learning and the recent market data, the model predicts that the value of Bitcoin Futures for the next week will be around "$44,026.60". This prediction is visualized in our graph comparing actual prices against predicted values over time, providing a clear view of the model's accuracy. Given the fact that the current value of BTC is slightly under 43,000, a trader could plan a long trade targeting 44,026.60 as their exit price. Entries could be taken in many ways such as utilizing key technical supports or waiting for breakouts above key resistance price levels. In all cases, a professional approach to taking risk in the marketplace always require managing such risk using stop-loss orders and making sure the trade size has been pre-calculated. There are many more options on how to have a contingency plan in place in case BTC moved in the opposite direction our AI expected it to. More on this in future articles. The model's learning curve, depicted in the accuracy graph, shows how the prediction accuracy improved over training iterations, reflecting the model's increasing proficiency at understanding the market. Conclusion Our quantitative analysis, utilizing a sophisticated Neural Network model, provides a prediction for the next week's value of Bitcoin Futures. While this prediction is grounded in historical data and advanced algorithms, it's important for traders to consider the inherent volatility and unpredictability of the Bitcoin market. The predictive model is a powerful tool, but it should be used as part of a broader strategy that considers market news, economic reports, and other indicators. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes, forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME:BTC1!
by traddictiv
2
Bitcoin Fibonacci Rising ChannelBitcoin's price movement is meticulously adhering to the contours of a Fibonacci Rising Channel, illuminating potential future resistance zones and critical levels. Here's a detailed breakdown of the current outlook: As of now, Bitcoin is poised for a significant move, targeting the key psychological level of $50,000. The Fibonacci Rising Channel provides a clear roadmap for this ascent, indicating potential resistance areas along the way. Anticipated Move: Upon reaching the $50,000 mark, a retracement is expected. A pullback to approximately $40,000 appears to be a plausible scenario, aligning with the dynamics of the Fibonacci Channel. This correction is an inherent part of the price cycle, offering potential entry points for strategic investors. Elliott Waves Analysis: Adding depth to our analysis, we incorporate Elliott Waves (EW) to discern the broader market structure. According to EW principles, the level of is a crucial invalidator, residing at $30,900. A breach of this level would challenge the current wave count and necessitate a reassessment of the broader Elliott Waves pattern. Key Levels to Watch: $50,000 Resistance: An area of significant psychological and historical importance. Observe price action closely as Bitcoin approaches this level. $40,000 Support: Anticipate a retracement to this level post the $50,000 test. This could present an opportunity for traders seeking entry points. Elliott Waves Rule: Invalidator: Rigorously monitor the $30,900 level. A sustained move below this point would trigger a reevaluation of the Elliott Waves structure, potentially signaling a shift in the overall trend. Bitcoin's trajectory within the Fibonacci Rising Channel, coupled with insights from Elliott Waves, provides a comprehensive framework for traders and investors. As we approach the pivotal $50,000 level, vigilant monitoring and a well-defined strategy are paramount. Happy Trading!
Long
by Vestinda
Bitcoin Futures : Gap filledCME Bitcoin Futures : Gap filled ...................................................................................................................... We are not registered or licensed in any jurisdiction whatsoever to provide investing advice or anything of an advisory or consultancy nature. and are therefore are unqualified to give investment recommendations. Always do your own research and consult with a licensed investment professional before investing. This communication is never to be used as the basis of making investment decisions, and it is for entertainment purposes only.
CME:BTC1!
by CryptoTrend-Alerts
😱 BITCOIN PRICE PREDICTION 2020/2021 😱 NEW PHASE ‼‼‼Here is the update on history of Bitcoin. NEW +1 Phase spotted. I find 7+1 Phases of the bitcoin from the top of 2013. 1. Descending Triangle Phase Price in form of triangle, in 2013 this pattern last for about 398 days. In the 2018, we can see similar triangle shape and price last here for about same period in 341 days. Next phase 2. Ascending Triangle Phase After breakdown of the phase 1, market in 2014 moved down and in start of 2015 formed Ascending triangle shape within 186 days. Now look at 2018/2019 zone of Ascending triangle , similar shape, similar period of 155 days. Next price moved upside to next phase. 3. Flat Zone Phase After moving upside price stuck in Flat zone for the 149 days in end 2015 and beginning of 2016. In middle of 2019 price stucked in similar Flat zone for about 162 days. Then we moving to next phase 4. Inverse Triangle Rise Phase In this zone we see about 105 days of rise in between middle of 2016. Here is highly debatable, but looks similar in end of 2019, you can see similar rise within 107 days. What happened next is phase of sudden crash. 5. Sudden Crash Phase So you see the 4th phase with 107 days rise, then within just few days price suddenly crashes in end of summer 2016. Same Sudden Crash happened in fears of COVID-19 in March 2020, right after Inverse Triangle Phase (4). Now move to phase 6. 6. Lack of Certainty Top In the end of 2016 we see the small volatility movement below resistance line and before this Top zone, we see steady rise for 153 days, before the market breakout from resistance line. In the 2020 we see steady rise after Sudden Crash (5) for about 156 days. Now price approaching resistance line without big volatility . Here is the prediction starts, in 2017 after breakout we faced 7th phase. NEW. 7. ATH Volatility Spike In the beginning of 2017 you can see green rectangle - at that time price approached 2013 ATH ($1150) and looks like there price start to jump really fast. Price made a pullback from ATH and then tried to break it, showing false breakout and then only at third attempt it broke the ATH level and Parabic started 8. Parabolic Rush Phase So after the breaking out from resistance line in early 2017, Bitcoin price started to grow, and after crossing previous highs market flooded with new traders and fresh money, which caused insane growth of the price for abut 357 days. Will this phase repeats after we cross 20k again? This is topic for discuss :) 👉 What price do you think we will face during end of 2020 and in 2021? Stay tuned, have a good profits Appreciate your likes and subscriptions This is Artem Crypto
BITSTAMP:BTCUSDLong
by ArShevelev
7
We Have Our Answer!Traders, A few posts ago, you will see that (2) two gaps were being focused on. The question was posed about which might be filled first. Many of my followers understand that my bias was to the upside gap being filled first. Thanks to the Blackrock ETF approval, this has occurred. And, as I stated in my video yesterday, I have unloaded 50% of ALL my positions (alts included), taken profits, and moved my stops up to break even. I will let the remainder ride for now and hopefully take the rest off at the 50 day ma of the SPOT BTC chart which intersect exactly with the bottom of that important support (now resistance) which I talked about in yesterday's video at 28,750. If we don't hit that and I get stopped out instead, no issue cuz I move all my stops to break even and will take no loss now. There still remain (2) two unfilled gaps: one at 20,290 from March of this year and one at 35,180 from May of last year. I still believe both will be filled soon. Stay tuned for more on this unfolding price action as, through charting research, I hope to gain a better grasp on how it will go. Stew
CME:BTC1!Long
by stewdamus