Bitcoin futures and looking forward
On Sunday, December 10th at 1800 Central Standard Time, history was made. The Chicago Board Options Exchange released for the first time ever a futures contract for Bitcoin. The importance of this occasion cannot be underestimated. Your’s truly here is a full-time trader and I always have Fox Business, CNBC or Bloomberg playing in the background. For the last month, I have heard pundit after pundit changes their mood and opinion regarding Bitcoin. And as we got closer to Sunday, there were believers. It is truly a fascinating time we are in, and we are so very fortunate to be involved in something like this.
What happened Sunday, December 10th, 2017
Note: I should have prefaced the above paragraph with an explanation and apology for my absence, we have had some wicked winds here in South Dakota and we had some power and internet issues. Which is really unfortunate considering the importance of the events in the cryptosphere since Sunday.
On the open of the first Bitcoin Future contract on the CBOE, something very interesting happened. Trading was halted twice. When the price went up 10%, trading was halted for 2 minutes. When the price went up to 20%, trading halted for 5 minutes. It did not get to 30%, but we clearly had some interest in the buying and support of Bitcoin. How did it affect the spot market (spot market would be what we trade on the cryptocurrency exchanges)? Let’s look.
1. From December 7th, 2017 to the open of the futures market at 1800 CST on the 10th, Bitcoin collapsed. About $3,000 per coin was eliminated.
2. Here we have the open of the Bitcoin Futures market. We had, as expected, a bit of a sell-off from 1400 to 12700 where the selling stopped. We then continued to observe buying at every single significant dip.
3. Price has been consolidating in the 17200-17000 area. This is a new area of price resistance, but since price continues to coil higher and higher near this level, we can expect the price to shoot above very quickly and with some significant momentum.
The next significant area of resistance and value is the $20,000 area. Just like the $10,000 level was our new ‘zero’ and major support level, we can do the same for the 20k level. Bitcoin continues to be a buyers market and every significant dip continues to find more and more buyers.