The CME Bitcoin Futures Expiration for this month is happening on June 26, which is this Friday, and it is likely that there will be significant market volatility both before and after the expiration.
For example, as of this writing on the morning of June 24 Bitcoin (BTC) has suddenly lurched downwards from $9,700 to roughly $9,300. This is actually the most rapid and significant market movement in the past week, and there is a good chance that it is related to the CME Bitcoin Futures Expiration.
Indeed, a previous article on Crypto.IQ closely analyzed the effects of CME Bitcoin Futures Expirations on the Bitcoin (BTC) spot market throughout 2019. Ultimately this analysis showed that there is always significant volatility around the expiration, and also that the market often has an inflection point at the expiration, meaning that the Bitcoin (BTC) market often starts a new bearish to bullish trend or vice versa within a week after the expiration.
To be more specific, during the last CME expiration on May 29 Bitcoin (BTC) had a price near $9,500, and the fact that Bitcoin (BTC) just plunged from being solidly above that level at $9,700 to significantly below that level at $9,300 indicates that bears are winning out during this expiration.
Overall, this suggests that Bitcoin (BTC) is most likely to drop further in price as the expiration approaches, although it is a fairly close match between bulls and bears this month, and it is still possible the bulls will win in the end.
Even if the market ends up declining more before this week’s expiration, the bright side is that once the expiration is complete Bitcoin (BTC) could restart a bullish trend.
It will be important to watch the trend of the Bitcoin (BTC) market during the first week after the expiration, since the trend of the first week often sets the trend for the rest of the month.
On a final note, of course using CME Bitcoin Futures expirations as a trading indicator is not an exact science, but understanding the dynamics and history of CME expirations definitely yields some potentially helpful trading clues.