‘Looks Bad’ — Bitcoin Futures Echo Days Before March Crash, Says Trader

Bitcoin (BTC) futures were worrying analysts on July 10 as volume data suggested serious weakness and the potential for a major pullback.

Uploading a weekly chart of CME Group’s Bitcoin futures to Twitter, Cointelegraph Markets analyst filbfilb did not mince his words describing the current climate.

Filbfilb: BTC futures “almost identical” to March

“Looks bad,” he summarized, noting that a volume indicator had returned to an identical setup as the week before Bitcoin crashed to $3,600 in March.

“Almost identical positioning as the big drop last time and a clear descending triangle full of wicks at resistance, trading below (point of control).”

Specifically, commitments of traders (COT)  — both retail and institutional — had maneuvered to exactly the same place that it was in just days prior to the crash. COT is updated on Fridays using data from the previous Tuesday; as such, the metric gives a snapshot of the status quo several days previously.

“I doubt it has changed much,” filbfilb told Cointelegraph in private comments. 

CME Bitcoin futures chart with March similarities highlighted

CME Bitcoin futures chart with March similarities highlighted. Source: filbfilb/ Twitter

COVID-19 dump to be avoided

Bitcoin has seen mixed price action this week as moves towards $9,500 were dictated by stock markets. A drop late Thursday took BTC/USD back to $9,000 support. 

Asked whether traders should expect an exact rerun of March, however, filbfilb remained more optimistic.

“I don’t think there will be a dump anything like last time,” he wrote.

“However; the positioning of the big players began 8.5-10.5k last time & that was before the climate took a nose bleed- these guys are short here on technicals rather than the external risk (in my opinion).”

Bitcoin derivatives have sparked differing narratives in recent weeks. In late June, a $1 billion open interest expiry event initially fuelled speculation of a price drop, but ultimately had no discernable impact on the market.

Other Bitcoin network fundamentals remain strong, with hash rate reaching all-time average highs this week and difficulty set for a 9% upward adjustment in two days’ time.

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