Suddenly stabilized in the $3,500 range? It turns out that the CME Bitcoin futures contract is about to expire

After the cryptocurrency market has recently experienced a series of high volatility, the price of Bitcoin has shown some signs of bottoming out since Tuesday (November 27), and its sideways trading has reached a level slightly above $3,500. psychological support.

At the time of writing, Bitcoin was trading around $3,734, up 1.58% from the previous session’s close. You know, in the past two weeks, the BTC/USD pair has not increased (or decreased) by more than $230. Although "$230" is a relatively large fluctuation in any other financial market, compared with the price performance of Bitcoin in the past few weeks, the current price trend has been relatively stable.

So, why did the Bitcoin market "suddenly" show an upward trend?

In fact, one of the important reasons is that the Chicago Mercantile Exchange (CME) Bitcoin futures contract will expire this Friday (November 30). Tom Lee, founder of Fundstrat, a Wall Street encryption market analysis agency, pointed out earlier that the volatility of the spot market will always increase whenever the Bitcoin futures contract expires. The usual "routine" is that the price now falls, then finds a support level, and then rises again shortly after the futures expiration date - if this rhythm is followed, even if it is not affected by any futures contract, before the price rebounds, it is expected that BTC/ USD will also test a new support level again, which may be in the price range of 3000-3500 US dollars.

On the other hand, U.S. President Donald Trump's threat to China to raise trade tariffs also stimulated the dollar's rise and hit a new high in nearly two weeks. At the same time, the trend of the U.S. dollar currency market has attracted more and more investors trying to hold the U.S. dollar to avoid losses in financial assets such as stocks, commodities, and futures that they hold due to the exchange rate-of course, including cryptocurrencies.

At this stage, Bitcoin's pressure level has been maintained at around $3,500, which seems to be the "lowest level" where the current market is bullish. Interestingly, the BTC/USD trading pair was already in a downtrend, and now, with the CME Bitcoin futures contract set to expire, the market has begun to unfold in two equally "strong" moves, down and up contest. However, a generally bearish time could see Bitcoin retesting the support of the descending channel before bouncing off resistance again. In this case, the BTC/USD trading pair will test the downside support and continue to fall, looking for the next support level - which may be $3000.

Not only that, but the relative strength index (RSI) momentum indicator is also showing a bearish trend (in fact, it has reversed 45 points), indicating a "sell" sentiment in the market. Also, the Moving Average Convergence-Divergence (MACD) is currently in slightly bullish territory, but appears to be about to reverse soon.

(Note: The relative strength index is a commonly used indicator in futures trading, mainly used to guide the investment effect of the stock market; the meaning of the moving average of similarity and difference is basically the same as that of the double moving average, that is, it is represented by the discrete and aggregated fast and slow moving averages The current long-short state and the possible development trend of the stock price, but it is more convenient to read. When MACD turns from negative to positive, it is a signal to buy. When MACD turns from positive to negative, it is a signal to sell)

In the short term, the market trend of the BTC/USD trading pair is in a symmetrical triangle, which means that for short-term traders, they can quickly exit or enter the market and obtain more attractive profits.

In fact, bitcoin futures will more or less affect the spot price of bitcoin, but the extent of the influence seems to be unknown at present. On the other hand, Bitcoin’s price decline may also be affected by other factors, such as scrutiny from global regulators, measures taken by tax agencies, the rise of other cryptocurrencies, and even media attitudes.

In any case, the CME Bitcoin futures contract will expire this Friday (November 30), will the price of Bitcoin rise, or fall? Let us wait and see.