Bitcoin closed a position above $ 42,000 on August 6 and since then the asset has consolidated above the range. With a value of ~ $ 45,000 at press time, the general sentiment surrounding the crypto market is starting to improve. Altcoins are also doing admirably as the industry is still on the cusp of another uptick.
While there are some similarities between the Q1 rally and now, not all sentiments combined point to a positive outcome. Yet.
CME Bitcoin Futures; far away from home?
Source: Skew
Since the bearish rush in May, the CME derivatives market has been fairly calm all summer. While BTC prices have rallied significantly in the past 2-3 weeks, there is still a lack of activity from the CME end.
In context, when Bitcoin last consolidated over $ 45,000, the CME Bitcoin futures averaged over $ 2.2 billion and the daily volume averaged $ 1.4 billion as well.
At press time, the OI was approximately $ 1.5 billion and the daily volume was $ 919 million. Well, these numbers weren’t very different, but it was an indication of the institutional trader’s caution.
What is the current waiting time about?
Source: ecoinometry
According to the CME COT report, the position of retail has not changed much even after the price of BTC went up. However, there have been a few changes that suggest a gradual change could take place. Right now, Smart Money is starting to resume base trading, which means that some of the positions are preparing for future entry into futures.
There is a clear dynamic in the ecosystem because if BTC starts an uptrend, the premium on futures would be higher than on spot trading. Additionally, at press time, the CME bitcoin options appeared more balanced with 4 puts every 3 calls.
Are we looking for triggers from CME?
Right now it is difficult not to point out one effect without including the other. Yes, CME’s interest would suggest a bullish rally has gained significant momentum, but the impact has not been particularly groundbreaking in recent years.
With Bitcoin, too, the positive dynamic was based on various factors, so that CME derivatives no longer hold a strong hand. With each bullish rally, the process changes to the next, and something similar could develop for the current resurgence.
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