The open interest on the CME Bitcoin futures exchange will be expiring in just a few hours. Most are expecting it to be a catalyst for a major market move.
Bitcoin futures are set to expire shortly, which in turn is expected to cause further volatility. Some are anticipating that shorters will be shaken out, but it’s currently unclear how the market will be impacted.
A Possible Bitcoin Short Squeeze
The Bitcoin market has been exceptionally bearish in the past week with Bitcoin (BTC) now trading for $8,500 at the time of publishing. Shorts are piling up on Binance, making up 65% of the order book. However, traders are split. Remarkably, Bitfinex is reporting 90% longs on its exchange in sharp contrast to the shorters on Binance. One of these camps will eventually be proven wrong.
The fact that CME Bitcoin futures are expiring in just a few hours has prompted some to say that we could soon see a ‘short squeeze.’ Shorters might get liquidated as Bitcoin pushes upward once the CME futures expire. All-in-all, we can likely expect some ‘shenanigans‘ as one user puts it on Twitter.
The CME futures are set to expire at 16:00 UTC and always expire on the last trading Friday of the month.
CME Continues to Dominate Markets
CME’s Bitcoin futures market has been growing at a steady rate since its rollout in December 2017. In fact, this month has seen the highest average daily open interest (OI) on record for CME Bitcoin futures. Earlier this month, CME Bitcoin futures topped $1B in daily trading volume for the third time ever. It’s clear that popularity for the futures exchange has never been higher.
This means that this closing might have a greater impact on markets than in previous months. However, the CME has repeatedly come under fire for manipulating markets, especially considering that the exchange was released right before Bitcoin’s drastic fall from $20,000 in 2017. The CME Group CEO has also said that Bitcoin needs to be “backed by the government” to truly succeed. So, it’s understandable that some are uneasy towards the CME and its involvement in the market.
Traders are now anxiously waiting for the CME Bitcoin futures close to determine their next move. The next support level is $8,350, according to a recent analysis done by BeInCrypto.