bitcoin-usd/”>BITCOIN‘S “TRUMP BUMP” GOES UP IN FLAMES 🚀💥
What to know:
- The Trump Bump, that fleeting feeling of hope, has fizzled out like a soggy firework on a rainy day.
- The market has moved on from the narrative that a pro-crypto President is the answer to all its prayers.
- The CME futures curve is still in contango, because, well, that’s just how it rolls.
It’s like the whole thing was just a wild goose chase, folks. The bullish sentiment that followed Donald Trump’s election victory has completely lost its steam, according to an indicator tied to the CME bitcoin (BTC) futures.
And what’s this indicator, you ask? Well, it’s the spread between “continuous” next month and front-month standard BTC futures trading on the global derivatives giant. A continuous contract is like a never-ending stream of successively expiring futures contracts, allowing for a continuous historical data series for analysis.
The spread has narrowed to $495, the lowest since Nov. 5, having peaked at $1,705 on Dec. 17, according to data source TradingView. In other words, it’s like the whole thing was just a wild ride, and now we’re back to reality.
“The narrowing spread between front-month and next-month CME Bitcoin futures could suggest traders are tempering their price expectations,” Thomas Erdösi, head of product at CF Benchmarks, told CoinDesk.
So, what does it all mean? Well, it means the market has moved past the narrative that a pro-crypto President is the answer to all its prayers. And macro correlations are back in the driver’s seat.
“What we can see is that the front contract basis has repriced lower substantially since the beginning of March, signalling moderating near term expectations that the primary catalyst for the recent rally—the election of President Trump—has been fully priced in,” Erdosi said.
And that’s not all, folks. Both BTC and Wall Street’s tech-heavy index, Nasdaq, have dropped 20% and 8%, respectively, since early February on a myriad of factors, including geopolitical uncertainty, Trump tariffs and the outlook for inflation and economic growth.
And let’s not forget the disappointment over the lack of fresh purchases in Trump’s strategic digital asset reserve plan. Last week, Trump signed an executive order, directing a creation of a strategic reserve that includes BTC seized in enforcement actions.
“The announcement about the Strategic Bitcoin Reserve is not what the market was hoping for. Many expected the Reserve to buy new Bitcoin, but instead, they stated they would not sell any of their existing Bitcoin or confiscated Bitcoin. While this is a positive move, it caused a sharp decline in Bitcoin’s price,” Ian Balina, founder and CEO of Token Metrics, told CoinDesk in an email.
Futures are still in contango
While the spread between next month and front month CME futures contracts has narrowed, the entire curve remains in contango, where far-dated futures contracts (with longer maturities) trade at a premium to near-dated.
That’s just how it is in all markets, folks. Due to factors like storage, financing, insurance costs, and expectations of rising prices over coming weeks or months.
“The fact that perpetual funding rates remain positive and the futures basis is still in contango suggests the recent move is driven by unlevered spot longs being squeezed, rather than broader market contagion,” Erdösi noted.
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2025-03-12 10:28