BTC and Other Cryptos in the Red as CME Bitcoin Futures Expire Today, December 28th
On Christmas Eve this year, Bitcoin (BTC) surprised many as its value rose by $280 in a few hours from around $3,990 to $4,271. Many crypto enthusiasts were quick to label the rise in value as a Crypto Santa Clause Rally. This type of rally is seen in the traditional stock markets when the value of tradable assets rises significantly in the last week of December.
The rally can be attributed to professional traders and fund managers winding down on their trading operations as they prepare to take a few days off for Christmas and New Years. This then leaves the markets wide open for retail investors who are generally bullish, to cause a significant jump in value of the tradable assets. Another reason for such rallies could be the general optimism surrounding the holiday season as well as the prospects of a New Year.
The Crypto Santa Claus Rally Did Not Last
Traditionally, Santa Claus rallies kick off before Christmas and end a few days after New Years. In the case of Bitcoin and the crypto markets, BTC would drop by $500 on Christmas day to close at around $3,770. The King of Crypto is currently valued at $3,667 as we enter the last weekend of 2018.
Could The Drop Be the Effect of Expiring CME Bitcoin Futures?
For the last few months since July this year, expiring CME Bitcoin futures have had little to no effect on the value of the crypto markets. When they last expired on Friday the 30th of November, BTC remained steady at $4,000 only to briefly test $4,280 on Sunday the 2nd of December. The King of Crypto would then continue to fall to recent lows of $3,190 on the 15th of December. (Perhaps we could see a similar pattern this month?)
Checking coinmarketcap.com once again, we find that BTC is down 3.45% in the last 24 hours. XRP is also experiencing a similar decline of 4.5% in the last day. The hardest hit of the top 10 cryptocurrencies in Bitcoin Cash (BCH) that is down 10.47% in the same time period. A screenshot has been provided below for a better visualization.
In conclusion, the slight jump experienced in the crypto markets right before Christmas had led many to believe we were about to experience a Santa Claus rally. Conversely, the value of BTC has since declined with all other cryptocurrencies still in the red as we wind down December. One is tempted to conclude that the decline is the effect of expiring CME Bitcoin futures but their influence over the crypto markets have shown to dwindle with time. With the New Year a few days away, one can remain optimistic that 2019 might bring better fortunes for the crypto markets.
What are your thoughts on the recent decline experienced in the crypto markets? Will 2019 bring with it new tidings? Please let us know in the comment section below.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.