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Bitcoin [BTC]: CBOE and CME record lowest Bitcoin futures trading volume since inception

Biraajmaan Tamuly

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Bitcoin [BTC]: CBOE and CME record lowest Bitcoin futures trading volume since inception
Source: Pixabay

The world of cryptocurrency has been expecting keenly the day when cryptocurrencies are more widely adopted by major investment firms. The recent comment of an SEC commissioner that a Bitcoin ETF has a high probability of being approved was a step forward towards this development. However, in what could be a spanner in the works, the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE) have recently seen the lowest Bitcoin futures volumes since they launched in December 2017.

According to research by Tradeblock, the data shows that Bitcoin futures trading volume has fallen significantly after they peaked in the summer, since their launch in early 2018.  In the summer of 2018, the combined trading volumes across the top five US exchanges had reached near equivalence with the spot trading volumes.

Over the course of 2018, CBOE and CME both launched their competing products in the market. However, over the course of the entire year, CBOE lost significant market shares to CME. The chart below demonstrates the volume of trade over the months.

CME vs Cboe Bitcoin Futures Notional Trading Volume Over Time | Source: TradeBlock

Upon careful observation of the chart, it can be observed that the initial volume trading was neck and neck between the institutions since the launch and it also reached a high point in July 2018, when the trading volume reached its summit at over $5 billion. However since then, there has been a consistent decline of volume which has caused spot volume trading to fall by almost 85%. Although the volume showed a little uptrend in November and December, the uptrend only came at the end of CME.

Bitcoin Spot Notional Trading Volume Over Time | Source: TradeBlock

According to research, the constant decline in spot trading might be following parity with the exit of retail traders from the crypto space following the collapse of asset prices. The exit might be linked to the falling of search engine trends for bitcoin and cryptocurrency which were earlier used to gauge retail investor curiosity.



Interestingly, Bitcoin trading had recently demonstrated the highest transaction per block and approached an all-time high of the mid-2017 price implosion.

The data above signifies that the futures trading activity has declined severely over the last one year since reaching a peak in the summer of 2018. The introduction of several new bitcoin platforms like Bakkt, Nasdaq and CoinFLEX, each looking to forward to launch future bitcoin products in the coming months, may improve this metric however.





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Biraajmaan is an engineering graduate who is exploring the ever-changing crypto verse while traversing his passion for cryptocurrency news writing. He is a Chelsea fan and a part-time poet and does not hold any value in cryptocurrencies yet.

Analysis

Bitcoin [BTC]: King coin’s Golden Cross confirmed; Greenspan hints at bullish market

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Bitcoin [BTC]: King coin’s Golden Cross confirmed; Greenspan hints at bullish market
Source: Pixabay

Bitcoin’s much-awaited Golden Cross, which many analysts claimed will lead to a resurgence of a bullish market, has been confirmed. The intersection of the 200-day moving average and 50-day moving average, which indicates the Golden Cross, was achieved over the past few hours.

Earlier today, the top cryptocurrency saw a massive rise after days of sideways movement. Bitcoin’s ascendance saw it break the $5,350 resistance level, which eToro’s Mati Greenspan had previously suggested will consolidate “buying pressure.”

Source: TradingView

Additionally, a major psychological level of $5,500 was also surpassed less than three weeks after Bitcoin broke the $5,000 mark.

The Golden Cross theory holds credibility among analysts in the cryptocurrency realm as it infers that the coin’s average price is above its 200-day equivalent. For the first time in over a year, the cryptocurrency market has seen its 50-day MA move above the 200-day MA, which according to many is a sign of a bullish market.

On the opposing side of the Golden Cross indicator is the Death Cross, where two indicators cross over into a bearish market i.e. the 200-day MA moves above the 50-day MA. The Death Cross manifested in April 2018, after the prices went into a free fall following the December 2017 high.

In April 2018, BTC was priced at just over $7,000, following which it lost more than 50 percent of its price by the end of the year. The price of the king coin has recovered exceedingly well in 2019 however, winning back almost 50 percent of its lost value.

Many analysts, including Greenspan, agree that the crossing of the two moving averages is a clear testament to the return of the bull market. Although he didn’t quite use those words, Greenspan tweeted,

“Ladies & Gents… The Golden Cross!
Bitcoin’s 50-day moving average (gold) crossing above her 200-day moving average (blue). 📈
This is yet another sign that we’re back in a🐂market. 🚀🌛”

However, in an exclusive interview with AMBCrypto last week, Greenspan had stated that the Golden Cross theory is a “lagging indicator,” as the Death Cross was last seen in April 2018, months after the market took a bearish turn.



In his view, the 200-day moving average is the key indicator. On April 2, Bitcoin broke this mark for the first time since March 2018, by recording a massive 17 percent daily gain and rising above $5,000.

Based on historic price changes with reference to the Golden Cross, the last time the 50-day MA soared above the 200-day MA, price of Bitcoin rose by over 8000 percent from $246 in October 2015 to almost $20,000 in December 2017. Given past market movements, the current market scenario, and the optimism in the air, the Golden Cross may just have initiated the Bitcoin bull market.





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