Predicting the bitcoin rate is not science. Rapper Fort Minor actually best describes this:
This is ten percent luck, twenty percent skill
Fifteen percent concentrated power of will
Five percent pleasure, fifty percent pain
And a hundred percent reason to remember the name
Bitcoin futures contracts expire
Ok, a few of those sentences make no sense, but the bottom line is that you can look at the past at most and learn from it (and have a dose of luck). That is exactly what Trustnodes does. Bitcoin futures contracts expire on the Chicago Mercantile Exchange on Friday, and this is not the first time these contracts have expired at the CME. Trustnodes therefore looks back and comes to the conclusion that the bitcoin rate can fall by ten percent this week. That amounts to around $ 1,000.
According to Trustnodes, this pattern has been visible since May:
“Few things are more predictable in bitcoin. The price drops every last Friday of the month when the futures expire, then the price rises again. Perhaps this prediction will one day be wrong, but the master manipulators have tailor-made deliveries every month. ”
Below you can see the price falls in the last week of every month since May.
Market can be manipulated
CMEs Bitcoin futures contracts have been offered since the end of 2017. These contracts are settled in dollars. You can best compare this with placing a blackjack sidebet in the casino. You do not play along, but you gamble that someone else plays good or bad. In other words, you bet on a fall or rise in the exchange rate.
And if you have enough money, or bitcoin, you can manipulate this market. The American Finance Association has analyzed this potential for manipulation. The report describes how investors work with market manipulation.
Because the future contracts are delivered in dollars, investors must also be active in the normal market. They cannot manipulate the price simply by concluding a future contract.
After using a short position (betting on a fall) or long position (betting on a rise), investors act on the bitcoin market to manipulate the price. Investors then ensure that by the end of the future contract, bitcoin has the best possible price. In this case, many investors have probably gone short.
The contract also shows that as the number of manipulators grows, the profit from manipulation drops to zero.
Data checked by Fundstrat
Tom Lee, researcher at Fundstrat, also sees this pattern around the expiry dates of these contracts. He looked at the whole year.
“Bitcoin sees dramatic price changes around the due date of CBOE futures. This has been noted by Justin Saslaw of Raptor Group. We have collected some data and this indeed seems to be true. Bitcoin has generally fallen by 18 percent in the 10 days prior to the expiry of the CBOE contract. “
The two exceptions to the rule were in February, which Lee believes is related to the tax season, and in April, when BTC’s price grew exponentially.
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