CNBC’s Brian Kelly came out with another bullish remark for the price of Bitcoin [BTC] after the slight rally seen by the coin earlier today. The cryptocurrency was briefly trading at above the $6500 level and is currently around the $6400 mark.
Kelly stated his reason for making the prediction was the expiration of CBOE’s Futures contracts. According to Justin Saslaw, an investor at Raptor Capital Management and an acquaintance of BK, this is a market movement that has been well-documented in the past.
“This is what happens to Bitcoin pre and post expiration. Prior to expiration on average in 2018, you’ve seen Bitcoin down almost 7%, and then expiration comes and over the next 6 days you see an increase of about 6% and that’s happened basically on average each of the expirations.”
To further reiterate his point, Kelly spoke about the peak that occurred in April after the expiration of futures. At the time mentioned by Kelly, Bitcoin started at the high $6000s and went up to a peak of above $8000. This represents a 20% growth 6 days after the expiration of futures contracts.
Kelly also talked about the number of short contracts that are currently on the Bitfinex market. The number reached a peak in April, with another high coming up soon. He stated:
“We’re at another high, there’s a bit of a short squeeze going on. We have a sort of short-term seasonality after futures expiration, and we have the potential for a big short squeeze in Bitcoin over the next 6 days.”
When asked about if this would bode well for the altcoin market, Kelly also explained the market correlation between Bitcoin and other cryptocurrencies. The altcoin market took a beating in the last bear run, with a drop of over 10% for most significant cryptocurrencies. He stated that the market still followed Bitcoin as the leader, due to the high amount of speculation over the past 60 days over an ETF being approved. He went on to say:
“…but what you did see today is stuff like Ethereum, almost 10% off its lows from yesterday, [and] stuff like Stellar, which is still holding up quite well. If you get a 10-15% run in Bitcoin on a short squeeze, it should carry everything else up.”
He also spoke about Bitmain’s upcoming Initial Public Offering [IPO] and stated that it will act as a stabilizer for the market. He stated:
“$5900-ish is the high level of mining cost. We have a big miner, Bitmain, that wants to do an IPO in Q4. That might act like a stabilizer for the Bitcoin market where the other markets have flushed out quite a bit.”
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