Technical analysis of Bitcoin future contract becomes crucial

Credit: Pixabay – Walid Mahdadi

The Bitcoin future contract of Chicago Mercantile Exchange (CME) gaining importance for market forecasting based onAT. Its trading volume is constantly increasing.

Key technical factors of the article:

• • The bitcoin price continues to defend its first technical support at $ 9,500. However, the BTC is not a safe haven against Covid-19 like gold or silver, but it does have its own bullish determinants.
  • Technical analysis of Bitcoin future contract becomes more important as the transaction volume increases.

Risk aversion is gaining momentum in the financial markets as the epidemic of Coronavirus Covid-19 causes a sharp slowdown in the Chinese economy and that international expansion is accelerating. Italy, Japan, Iran, South Korea have seen their number of new cases soar in recent hours and the World Health Organization (WHO) is sounding the alarm on Africa, India or Indonesia where structures are lacking to identify the cases of Covid-19.

In the financial markets, capital continues to move towards assets with a strong refuge "aspect" like the gold ounce and the price of silver-metal, but the Bitcoin is not (yet?) considered a financial asset that can protect liquidity from systemic risk.

But the BTC does not need this factor to progress, it has its own bullish determinants.

Bitcoin futures contract price – TradingView (left)

In this new technical post, I will come back to the growing importance of Bitcoin future contract vis-à-vis the BTC classic. Above, you can view a graph which juxtaposes the future BTC contract on the left and the classic BTC according to Bitstamp on the right.

The dynamics of these two markets are naturally identical from the point of view of price action. But it differs in terms of the dynamics of trading volume.

Still at Bitstamp, the daily volume traded on conventional BTC is lower than that of spring 2019, while the dynamics of daily transaction volume East clearly bullish on the future contract to the Chicago Stock Exchange.

Recall the following:

• Bitcoin future contract represents 5 BTC
• On average, 20,000 contracts are traded every day in recent weeks
• For an average price of $ 9,000, daily volume often exceeded one billion US dollars (20,000 * 5 * $ 9,000)

This upward momentum in volume on the future contract is important and calls for more credit to be given to technical analysis of future BTC, at the expense of the conventional market.

The best option, however, remains to combine the two markets in its technical analysis. The latter remains bullish in the short term above the first support at $ 9500.

Follow Vincent Ganne on Trading View for further analysis on the financial markets. The technical thresholds and the trend indicated above are based on the technical approach "price, momentum, sentiment, ichimoku". The data come from Bitstamp and the graphics of TradingView.

This content is provided for informational purposes only and does not constitute an investment recommendation. We remind you that theinvestment in crypto assets, including Bitcoin, is extremely risky. Cryptocurrency prices are prone to large and unpredictable price movements.