Numerous traders trust the narrative that BTC price drops ahead of CME BTC futures finishes, but statistics displays the trend is all bark & no bite.
Factually, activity nearby the BTC monthly futures & choices finish has been answerable for weakening bullish momentum. A few studies from 2019 found a 2.3% average droplet in BTC price 40 hours before the CME futures payment date.
Though, as Cointelegraph reported in June 2020, the result faded away. While 2020 appears to have disallowed the possible negative impact of CME finishes, so far, the current year seems to authenticate the theory. Bitcoin’s price has been repressed ahead of futures & choices expiry in the first 3 months of 2021.
Approximately investors & traders have piercing out that Bitcoin’s implausible meeting after the new futures & options expiry dates has become a tendency.
BTC has efficiently rallied in the days next the expiry, but increasing this examination uncovers a less than satisfactory tendency.
3 consecutive events do not prove a tendency
The previous 13 months have been nonentity short of spectacular for BTC, as the cryptocurrency posted 788% gains. August 2020 twisted out to be the nastiest month, as BTC obtainable a 7.5% negative presentation. Thus, choosing random preliminary points within the month will probably show a similar optimistic trend.
For instance, if one usage the “last quarter” moon stage as a proxy, the odds that a meeting takes place after each occasion are very high.
As portrayed above, indeed, BTC united after 5 out of the previous 6 instances. The only deduction strength be that positive trends are the standard somewhat than the exception during bull runs.
Though their strength be some clarification to the reason behind BTC’s end-of-the-month deficit, these are only theories.
While market creators & arbitrage desks could advantage from overpowering the price after a meeting, other forces, counting leverage futures longs & call choice holders, would balance that out.
BTC price did not drop in 3 of the previous 7 expiries
Therefore, it makes intelligence to examine the possible price suppression ahead of the expiry in its place of looking for clarifications for a rally during a bull market.
Both Oct. & Dec. 2020 expiries unsuccessful to current any negative pressure ahead of such dates. Temporarily, the 12% positive performance on the 5 days that headed the most recent April 30 finishing also puts a big question mark on how expressive the CME event really is.
Seeing there has not been a price reduction ahead of monthly futures & choices expiries in 3 of the last 7 examples, this evidence should put a nail in the coffin of the groundless myth.
As stated, previous, trying to develop theories on why sellers acted more violently on specific dates is improbable to yield consequences.
As exposed above, Bitcoin’s price unsuccessful to fail in three out of the last 7 finishes. A 57% achievement rate should not define a trend when a positive presentation after a specific date has been proven shared during a bull run.