[2018-01-28] Bitcoin Futures Report Shows Bullish Sentiment Is In the Air

[ivanpoldark]

Bitcoin and cryptocurrency markets, in general, have been bearish during the first month of 2018 after many digital assets reached all-time price highs this past December. A lot of people have been following the correlation between the newly added bitcoin-based derivatives markets offered by Cboe and CME, alongside bitcoin spot prices over the past four weeks. Over the last few weeks, most of the bitcoin futures contracts have been bearish as traders forecasting the recent downtrend in value ‘shorted’ the market. However, according to recent data, bitcoin-futures bets are showing that a great majority of the contracts are betting ‘long’ on bitcoin’s price — predicting that BTC’s value will be rising shortly.

CFTC Report: Bitcoin Futures Contracts Are Overwhelmingly Bullish This week

The introduction of the recent futures markets stemming from Cboe and CME had brought a lot of hype and overheated trading to cryptocurrency markets. Following the launches bitcoin’s market value spike to $19K per BTC but since the new year, the currency has seen a 40 percent loss in value. Since the bitcoin derivatives products began, the Commodity Futures Trading Commission (CFTC) has published reports on Cboe’s market performance. Since December the CFTC’s reports show that futures traders were betting against the price of BTC, indicating bearish sentiment and spot prices followed the contract predictions. This past Friday’s CFTC data tells a different story as the contracts are overwhelmingly bullish — meaning Cboe traders expect the price to rise.



This week’s CFTC report states that leveraged positions show 1,142 contracts are ‘long’ (betting the price will rise) while only 518 contracts are ‘short’ (betting the price will drop). The data is in stark contrast to the weeks prior when Cboe contracts bet way more ‘short’ as contract counts indicated shorts overwhelmed longs 4 to 1. Even news.Bitcoin.com’s weekly trading analyst, Eric Wall, has the same inclination as he writes in his most recent report:

I believe we are about to break out from an extended period of consolidation. I’m opening a medium-sized long position (saving some of my trading balance in case we do get a chance at ~$8k).

Read more: https://news.bitcoin.com/bitcoin-futures-report-shows-bullish-sentiment-is-in-the-air/

[Hell-raiser]

Bitcoin and cryptocurrency markets, in general, have been bearish during the first month of 2018 after many digital assets reached all-time price highs this past December. A lot of people have been following the correlation between the newly added bitcoin-based derivatives markets offered by Cboe and CME, alongside bitcoin spot prices over the past four weeks. Over the last few weeks, most of the bitcoin futures contracts have been bearish as traders forecasting the recent downtrend in value ‘shorted’ the market. However, according to recent data, bitcoin-futures bets are showing that a great majority of the contracts are betting ‘long’ on bitcoin’s price — predicting that BTC’s value will be rising shortly.

I'm curious while people are so obsessed with these futures nowadays? If you buy a contract, you won't receive bitcoins at the end of its life-cycle, end of story. If Bitcoin tanks your account will most likely get destroyed due to margin call. If you could receive real coins, you wouldn't care much since you would have them in your own pocket, and you could wait patiently till the price reverts. But with futures your money will be taken from you. So what's the point?

[BitHodler]

I'm curious while people are so obsessed with these futures nowadays? If you buy a contract, you won't receive bitcoins at the end of its life-cycle, end of story. If Bitcoin tanks your account will most likely get destroyed due to margin call. If you could receive real coins, you wouldn't care much since you would have them in your own pocket, and you could wait patiently till the price reverts. But with futures your money will be taken from you. So what's the point?

The point according to certain people believing these futures have importance, is that it may showcase the interest and expectations of professional parties. Aside from that, I don't see anything interesting here.

Institutions are able to buy themselves exposure, which is what they are comfortable with. If we think a bit further, they are perfectly fine with that exposure since they have zero interest in acquiring actual Bitcoins.

It's large parties looking to bank on the wide fluctuations, which I can understand. In most cases even if they want to buy actual coins, they aren't allowed to do so. These instruments are the only way to obtain exposure.

[cr1776]

Bitcoin and cryptocurrency markets, in general, have been bearish during the first month of 2018 after many digital assets reached all-time price highs this past December. A lot of people have been following the correlation between the newly added bitcoin-based derivatives markets offered by Cboe and CME, alongside bitcoin spot prices over the past four weeks. Over the last few weeks, most of the bitcoin futures contracts have been bearish as traders forecasting the recent downtrend in value ‘shorted’ the market. However, according to recent data, bitcoin-futures bets are showing that a great majority of the contracts are betting ‘long’ on bitcoin’s price — predicting that BTC’s value will be rising shortly.

I'm curious while people are so obsessed with these futures nowadays? If you buy a contract, you won't receive bitcoins at the end of its life-cycle, end of story. If Bitcoin tanks your account will most likely get destroyed due to margin call. If you could receive real coins, you wouldn't care much since you would have them in your own pocket, and you could wait patiently till the price reverts. But with futures your money will be taken from you. So what's the point?

I agree with what you said, but I think people would say two of the points are:
1. You can hedge with futures and not need to understand bitcoin security.  Or miners might want to be able to sell known supply at a particular point and the be able to cover it later.
2. I think this is the more important one though: it gives access to bitcoin in regulated financial markets.  In and of itself that is not important but the expectation is that it will help address the concerns the SEC had when they denied the bitcoin ETFs last year.  If that is accurate and the SEC doesn’t keep moving the goalposts, it bodes well for bitcoin ETF approvals in the future.