Bitcoin

Bitcoin Price Plummets as CME Futures Expiration Nears

After a period of consolidation around $10,000, Bitcoin decisively broke below this key support level and has now plummeted towards the lower-$9,000 region.

This downwards momentum comes as the CME Bitcoin Futures near their expiration date, which some analysts believe may contribute to the cryptocurrency’s near-term volatility.

Bitcoin Drops To $9,500 as Bulls Lose Their Strength

At the time of writing, Bitcoin is trading down over 5% at its current price of $9,950, which marks a slight surge from its daily lows of below $9,500.

Today’s drop is simply an extension of the downwards momentum that first began yesterday morning when the cryptocurrency failed to hold above $10,000 – which has proven to be a strong level of support for BTC over the past several weeks.

It is important to point out that this is not the first time in recent history that Bitcoin has broken below $10,000, as earlier this month it dropped to lows of $9,600 before finding strong support that allowed it to climb back into the five-figure price region.

The Cryptomist, a popular cryptocurrency analyst on Twitter, explained in a recent tweet that BTC is trading within a descending triangle that may ultimately lead it to visit the $7,000 region.

“$BTC: We are now testing weekly descending triangle which breaks. The best bulls can do is push this at 10k, which I would absolutely lovey so I can short the shit out of it! Next support regions 9.1k, then 8.7. My feeling is we go down to 7.3k region,” she noted.

CME Futures May Perpetuate BTC Volatility

Bitcoin’s present volatility may be further perpetuated tomorrow when the CME BTC Futures expire, as this has historically coincided closely with massive BTC movements.

Luke Martin, another popular crypto analyst on Twitter, recently spoke about the empirical impact of CME Futures expirations on the cryptocurrency’s price action, pointing to a chart that shows BTC’s average and median performance in the days leading up to, and following, the futures expirations.

“Full table so you can do some quick maths. Relationship not as pretty as you would like to see for the ‘always dump before & always pump after’ narrative. $BTC returns have generally been negative leading into and positive after but last 2 exp’s messed that up,” Martin noted.

It is highly likely that Bitcoin’s near-term trend will grow increasingly clear as the futures expiration nears and as the crypto continues to react to its current position in the $9,000 region, as a failure to climb any higher in the coming hours could mean that further losses are imminent.