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The Next Leg in Bitcoin’s Bull Market Is Coming as CME Announces Plans for Futures

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Have you had enough of bitcoin’s relentless surge? Well, the digital asset is expected to get a whole lot more expensive now that the world’s biggest exchange has announced plans for bitcoin futures.

Peak Bitcoin? Think Again

In an apparent change of heart, CME Group Inc. has announced plans to introduce bitcoin futures by the end of 2017. The announcement came a month after the world’s biggest futures exchange dismissed any notion of entering the cryptocurrency space.

The move will allow institutional investors to get in on the world’s hottest asset class using a more conventional market tool. Futures are essentially financial contracts obligating the buyer to buy an asset or the seller to sell the asset. The futures market is largely tied to commodities, equities and Treasury notes.

CME Group’s foray into cryptocurrency is influenced by a recent decision by CBOE Global Markets Inc. to enter the market. CBOE has already announced plans to begin offering bitcoin futures contracts by early 2018. It is currently waiting approval from the Commodity Futures Trading Commission before moving forward.

According to Bloomberg, the CME futures contract will settle in cash and reflect daily price action from the CME CF Bitcoin Reference Rate. The Reference Rate is drawn from digital exchanges Bitstamp, GDAX, itBit and Kraken. Crypto traders will notice that Gemini is missing from the list. That’s because it has already entered into a deal with CBOE.

CME’s chief executive Terrence Duffy issued the following statement on Tuesday:

“As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.”

“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract,” Terry added, according to CNBC.

Bitcoin Climbs to New Record

Bitcoin climbed to new record highs on Tuesday, as investors rallied behind growing institutional demand for digital assets. BTC/USD peaked above $6,400 for a gain of more than 4%. At press time, it was trading around $6,379. The latest rally gave bitcoin a market cap of more than $106 billion. As a result, the total market capitalization for all digital assets above $182 billion for the first time.

As the world’s largest cryptocurrency, bitcoin has skyrocketed more than sixfold this year. Institutional investors have paid close attention to the rally, but have hesitated to enter an unproven market with little regulatory oversight. The introduction of a bitcoin derivative is a major step toward the development of bitcoin as a more established asset class. As such, investors can expect a favorable outlook as institutional cash enters the market.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 695 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Crypto Update: Another Rally Attempt in Crypto-Land

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The major cryptocurrencies are all trading slightly higher today, following two bearish days that brought them back to last week lows, and for now, another breakdown has been avoided, despite the overwhelmingly bearish broader picture. The modest bounce left our trend model on sell signals across the board, and odds continue to favor new lows in the coming period, so traders and investors should remain defensive here.

The top coins are trading well below the weekend bounce-highs and without new swing highs, the short-term trend also remains clearly bearish, even considering the deeply oversold long-term momentum readings and the abysmal sentiment. So while a larger scale bounce remains possible in the coming weeks, perhaps following a failed breakdown pattern, bulls should still be patient until we sell clear technical improvements in the segment.

With that in mind, traders and investors shouldn’t enter positions even in the slightly stronger coins, and odds still favor the continuation of the bear market, with new lows likely in the coming days. That said, a successful test or a failed breakdown could trigger a larger scale correction, with the broader picture still being deeply oversold and with investor sentiment still being very negative. For now, there is no sign of an imminent rally, with all eyes on the $3000 in Bitcoin.

BTC/USD, 4-Hour Chart Analysis

Bitcoin rallied as high as $3450 today, but it failed to get close to the $3600 resistance and the weekend high, so the short-term downtrend remains intact despite the bounce. For now, our trend model is still on sell signals on both time-frames, and traders should stay away from entering new positions here, with the long-term picture also being clearly bearish.  Further resistance is ahead in the $4000-$4050 zone, while key long-term support is found near the $3000 price level.

ETH/USD, 4-Hour Chart Analysis

Ethereum is stuck below the key $95-$100 zone even following today’s bounce, keeping the coin on a short-term sell signal in our trend model. Odds still favor a move towards the next major support zone between $73 and $75, and only a quick recovery above the primary resistance zone could change the short-term trend.

The steep long-term downtrend is clearly intact in the coin, and traders and investors should still not enter new positions here, with further strong resistance zones ahead near $120 and $130.

Altcoins Avoid Breakdown but Strong Resistance Zones Lie Ahead

Dash/USDT, 4-Hour Chart Analysis

Despite yesterday’s weakness, last week’s lows held up even in the relatively weaker majors, and although that’s an early sign of stability, it’s not enough to warrant upgrades in our trend model. With still no bullish leadership present in the segment the continued technical weakness in the lagging coins, such as Dash reinforces our bearish long-term view.

XRP/USDT, 4-Hour Chart Analysis

Ripple only experienced a weak bounce, and although it continues to trade near the $0.30 level, the coin is still among the relatively weak coins from a short-term perspective and the renewed long-term sell signal is also in place.

We still expect a move towards the prior bear market low near $0.26, with a weaker support level found above that near $0.28, and traders and investors shouldn’t enter positions here, with resistance levels above $0.30 ahead at $0.32, $0.3550, and $0.3750.

Litecoin/USD, 4-Hour Chart Analysis

While Litecoin managed to hold up above its recent swing low and the $23 support level, it remains in steep short- and long-term downtrends, and we would need to see significant technical strength for even a short-term trend change.

Our trend model is on sell signals on both time-frames, and below $23, the next major support zone is found between $20 and $20.50 with strong resistance ahead near $26 and between $30 and $30.50.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 413 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin Price Avoids Bigger Fall amid Market-Wide Consolidation

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Bitcoin traded to the upside on Wednesday, snapping a multi-session losing streak that dragged prices toward new lows for the year. The outlook on BTC and other cryptocurrencies remains overwhelmingly bearish, which means investors can expect a re-test of last week’s lows relatively soon.

BTC/USD Update

The bitcoin price reached a high of $3,570.00 on Bitfinex, a modest recovery from early-week lows. It last traded at $3,513, having gained 2.2% from the previous day. BTC values on Bitfinex had a $100 premium compared with exchanges like Coinbase, Bitstamp, Bittrex and Gemini.

Looking to the aggregate data via CoinMarketCap, bitcoin is trading hands at an average of $3,478 for a gain of 2%. Daily trading volumes reached $4.6 billion, with spot accounts driving an increasing share of the market activity. Over the last 24 hours, the BitMEX derivatives exchange processed 19.2% of bitcoin trades on virtual currency platforms. That figure was around a quarter on Tuesday.

The total market capitalization of all cryptocurrencies recovered around $110.4 billion on Wednesday, having gained roughly $3 billion from Tuesday’s low.

Volatility on the Rise

Bitcoin continues to exhibit extremely high volatility relative to the past six months, where markets carved out a narrower and more predictable trading range. The brief era of ‘stable bitcoin’ came to an abrupt end last month as market participants braced for a highly contentious hard fork of the bitcoin cash network. Markets have yet to recover from that cataclysmic event, which not only ruptured the BCH community, but diverted valuable hash power away from the original bitcoin.

The bitcoin volatility index, which tracks the daily price fluctuations of BTC over the past 30 days, has rose to 5.7% on Tuesday, according to bitvol.info. That’s the highest level since early March, when the market was facing a broad reversal from record highs.

BTC has struggled to put together a convincing recovery in the wake of the recent selloff, with prices overcoming the $4,000 barrier on only one occasion in the last two weeks. The new resistance test appears to be concentrated around $3,700-$3,800, a clear sign that the market was in the process of carving out lower highs and lower lows. On the opposite side of the spectrum, the leading digital currency has fallen to the low $3,300 on multiple occasions and appears poised to test the upper range of the $2,800-$3,200 support zone.

The general view seems to be that bitcoin still has a way to go before fully bottoming out. That largely explains why so many investors have been reluctant to enter the market at today’s prices. For the time being, attention should be paid to the aforementioned support to determine possible entry.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 695 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Bitcoin

If Bitcoin ETF Doesn’t Happen by February, How Will it Affect the Market?

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The Bitcoin exchange-traded fund (ETF) has already become the catalyst of the next big rally of the cryptocurrency to the minds of many investors.

Realistically, however, the U.S. Securities and Exchange Commission (SEC) could easily deem the cryptocurrency market unready of handling a large-scale investment vehicle like an ETF based on the wild volatility in the prices of major cryptocurrencies over the past year and the lack of surveillance in smaller markets.

Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim, has said that while the probability of the approval of a Bitcoin ETF could increase over time, as of now, there only exists a 10 percent chance for the ETF to be approved.

He said:

“Here’s my prediction, with a big disclaimer. This is not in any way meant as advice. Don’t even think about trading on this. I have no idea how the ETF decision will impact the markets anyway. If the deadline were today, I’d give the ETF a 10% chance of approval. My prediction is based largely on the manipulation issue. I think the chance of ETF approval will go up over time as market structure continues to develop & more surveillance-sharing agreements are entered.”

So How Can a Bitcoin ETF Rejection Affect the Market?

Historically, the cryptocurrency market has generally not been affected by a certain event or a catalyst during both bear and bull markets.

In the bull market, regardless of negative events and news coverage, due to an overwhelming demand for crypto, the prices of cryptocurrencies tend to increase. In a bear market, as seen in the case of Nasdaq, Fidelity, and NYSE, positive announcements have minimal impact on the prices of digital assets.

The potential effect on the approval of a Bitcoin ETF on the cryptocurrency market remains unclear, and no one really knows. There have been several reports claiming that if 10 percent of investors in the stock market invest in the Bitcoin ETF, the Bitcoin price would surge to a certain amount.

But, such a vague prediction is no different than a startup thinking “China has 1.3 billion people, 10 percent of that is 130 million, so we can at least secure 130 million customers.” Some startups actually received investment from venture capital firms with this theoretical strategy and lost out in the Chinese market.

Such “if” predictions occur quite frequently in crypto. If 10 percent of the offshore banking sector invests in Bitcoin, the dominant crypotcurrency could be worth $3 trillion. If 10 percent of gold investors invest in Bitcoin, the asset could be worth $700 billion. But these numbers are merely vague estimates and in no way represent real numbers.

The rejection of an ETF approval could affect the market if the price of Bitcoin has been increasing in anticipation of the announcement.

The Case of Winklevoss ETF in July

On July 26, when the highly anticipated Winklevoss Bitcoin ETF was rejected by the U.S. SEC, the price of Bitcoin did not experience a substantial move on a weekly basis. It dropped from $8,200 to $8,000 but recovered to $8,200 the very next day.

The price of BTC could begin to increase as the February deadline of the VanEck ETF comes closer, but the market will likely not lose out more than the value it added in anticipation of the ETF, unless the price of Bitcoin increases solely due to the ETF approval.

Hence, whether the ETF is approved or not, an immediate impact on the price of Bitcoin should not be expected, especially as the bear market of 2018 extends to next year.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.1 stars on average, based on 5 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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