Bitcoin analysts debate if true bottom exists, as futures suggest big 2020

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Updated: 09 December 2019

Bitcoin analysts may have too much time on their hands. While nearly everyone accepts that Bitcoin’s future is bright, the near term is murky. At one moment, the debate was whether there would be a Santa Rally or not. Now there is another shift – Has Bitcoin really established a “true bottom” for 2019? If you recall those dark days of 2018, Bitcoin did form a bottom in early December of roughly $3,130, but it took several months before a few analysts stepped forward to declare it as so. Today, the consensus is that $6,500 is our new “true bottom”, but there are several doubters in the field.

Before we go too far into positives and negatives, the good news over the weekend is that Bitcoin once again resumed its steady climb, the one you might expect from a “mature” asset, nothing spectacular, but a 4.2% gain over five days. BTC now tracks $7,510, a slight uptick from the $7,200 figure five days back. There is even better news coming from the futures markets, where analysts at Forbes have noted something very interesting on the CME contracts for BTC out into 2020.

At the end of November, Bitcoin prices dropped 6%, but the premium investors were paying for March 2020 contracts actually shot up 30%. If you went out one more quarter, the June 2020 contracts had an implied volatility of 70%, as compared with 55% from a previous period. Forbes spoke with analysts from Arcane Research, who noted: “The premium rates on bitcoin March 2020 contracts have been increasing, although the bitcoin price has decreased. This is not a common observation.”

The researchers went on to say: “This clearly shows that traders anticipate changes in the bitcoin price. To put this in perspective, gold options for June 2020 trade with an implied volatility of 11.5%.” There has been a great debate as to whether Bitcoin prices would surge next year, a response to the highly anticipated 4-year halving event. At present, one camp says the surge is already baked into prices, while the other camp argues just the opposite. This data seems to imply a general shift towards the camp that favors a surge, since, as one analyst put it: “Recent developments suggest 2020 could be a big year for bitcoin.”

So, if next year looks fine, at least out to March and June, what about the next three months? Once again, the analyst community is betwixt and between. An analyst that only goes by the name of “James”, but who has worked with NewsBTC on occasion, has now suggested an eerie similarity exists when he compares now to last year’s May/June timeframe.

NewsBTC reports his thinking is that: “In both cases, Bitcoin was rejected by horizontal resistance at $9,500, the price has found itself stuck between $7,800 and $5,700, and the RSI has entered into a “bear market zone.” Should history repeat, Bitcoin may find itself heading back under $6,000 again, then $5,000, and maybe even under $4,000.”

There have been several analysts that have begged to differ with this proposition. One name of note stepped forward, suggesting just the opposite. His pseudonym on social media is “FilbFilb”. He gained fame when he predicted in September of last year that Bitcoin would actually bottom out around the $3,000 mark, based on what he called a “mean reversion move”. Now he has come out saying that $6,500 is a firm bottom, based again on his perspective.

He notes things like a “miner’s breakeven point” and other technical signals, but his favorite is in agreement with the CoinDesk BTC weekly chart we presented last week, repeated below: