The price movement of Bitcoin is sometimes compared to the famous bubbles in the traditional markets. In fact the graph of cryptocurrencies is very similar to the charts of stocks of large technology companies during the dot-com bubble. However, we have previously found that BTC cannot be equated with regular assets.
Instead, the founder of NodeSource Joe McCann suggested his method of search for potential dependencies cryptocurrency from external factors. Meccano managed to find and prove the Parallels between the price of Bitcoin on a regular cryptomeria and futures price of BTC.
How does it work?
According to Maccana, the situation in futures trading “foretells” the future market price of Bitcoin. In other words, horse racing charts futures can be interpreted to make predictions.
Once again, #bitcoin futures forecast story for the spot price.
Check the timestamps of the contango spike (15:11 UTC)
And the spot price at the same time (15:11 UTC $8045.80)
Followed by a jump in price (15:12 UTC $8142.40)
And again a jump in price (15:13 UTC $8221.18)
Especially traders should pay attention to the races of contango. For the last hidden state when a futures contract is traded more than the current spot price or more expensive than the futures contract with an earlier expiration month. The jumps indicate that the stock futures price in the future is higher than its current price. The Parallels between BTC price and contango very easy to hold. Makkan posted several charts to support his word. Take a closer look.
The futures price (the green line in the above image) spiked at 15:11 UTC. The market value of Bitcoin (black line) followed the same path in just a few minutes.
More precisely, in two minutes.
After some time the indicator XBTU19 (the futures price) began to perform the role of a lagging indicator for the market price of BTC. In other words, the pattern of price movement was repeated on the stock exchanges with very high accuracy.
Speaking of futures. Already very soon to begin testing of the trading platform Bakkt. It will decide some very important issues that currently impede large investors to enter the stock market.
To trade futures on bitcoin, you can exchange Bitmex ,but first check out our guides on to trade on Bitmex.
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