Cindicator, a company which develops predictive Hybrid Intelligence (human + artificial intelligence) for effective asset management, today published a report “Bitcoin Futures: Market Evolution,” a new analysis of the emerging market for bitcoin (BTC) futures.
For this analysis, Cindicator researchers first looked at volumes on futures and volumes on crypto exchanges in bitcoin terms in order to have an idea about the liquidity and the development of the market. The second part of the report is dedicated to BTC price and volatility movements around futures expiry dates in order to find evidence of recurrent market behavior during these periods.
The report provides a month-by-month breakdown of this analysis dating to when the first BTC futures began to expire in January 2018.
Conclusions
The Bitcoin Futures: Market Evolution report reaches the following key conclusions on the relationship between BTC futures and the BTC market as a whole:
- The presence of bearish trends during price actions can influence BTC prices in a much stronger way with respect to positioning around futures expiries
- The common idea that Bitcoin’s price is always dumped before expiries and pumped right after them has no solid basis (although there are cases when expiration dates should be considered).
- This analysis should be reconsidered when futures and OTC volumes start to converge, something not so unlikely given the possible entry of institutional investors into the crypto market influenced by, in part, lower Bitcoin volatility, and the bearish market trend.
“Looking at the past movements of Bitcoin’s price, we can see that there is no golden rule for trading based on futures expiration dates. The overall market trends can influence Bitcoin prices in a much stronger way. Our conclusions from this research are a good representation of the overall value we seek to provide to crypto investors by presenting different reasons for why certain market movements might happen and encouraging doing research and using analytical tools.”
Discussion