The bullish sentiment seen after Donald Trump’s victory in the November 5th presidential election has completely disappeared, according to indicators tied to CME Bitcoin (BTC) futures.
The indicators being considered are the spread between next month’s “sequences” and the first month standard BTC futures trading at the global derivatives giant. A continuous contract is a calculated representation of a series of consecutively expired futures contracts, allowing for a continuous series of historical data for analysis.
According to Data Source TradingView, the spread reached its lowest price of $495 since November 5th, peaking at $1,705 on December 17th. In other words, it completely reversed Trump’s uplift, a sign that undermined the bullish sentiment in the market.
“The spread between the CME Bitcoin futures for the last month and the next month could suggest that traders are easing price expectations,” said Thomas Erdösi, product director at CF Benchmarks.
BTC CME: The spread of futures for the month before next month. (tradingView/coindesk)
Trump’s bump rewind probably means that the market has overcome the narrative that the White House custody president is good for the industry and that macro correlation is back in the driver’s seat.
“What we can see is that frontline contract standards have fallen significantly since the beginning of March, easing short-term expectations that President Trump’s election, the main catalyst for recent rallying, is fully priced,” Eldosi said.
It’s already happening. NASDAQ, the BTC and Wall Street high-tech heavy index, has fallen 20% and 8%, respectively, on countless factors, starting in early February, on geopolitical uncertainty, Trump’s tariffs, inflation and economic growth outlook.
Furthermore, the Bitcoin market has had to dilute the disappointment at the lack of new purchases in Trump’s strategic digital asset reserve plan. Last week, Trump signed an executive order, directing the creation of strategic preparations, including the BTC seized in enforcement action.
“The announcement on the strategic Bitcoin reserve is not what the market wanted. Many people were hoping for the reserve to buy new Bitcoin, but instead said they would not sell existing or confiscated Bitcoin.
Futures are still in Contango
The spread between CME futures contracts from next month onwards, has narrowed, but the entire curve remains in Contango, with far-flung futures contracts (longer maturities) selling contracts from premium to almost age.
This is usually the way in all markets due to factors such as storage, financing, insurance costs and expectations for price increases over the coming weeks or months.
“The fact that the persistent funding rate remains positive and the futures standard is still in Contango suggests that recent movements are driven by the narrowing of unfinished longs rather than broader market contagion,” Eldesi noted.
