Bitcoin: One tick closer to a decisive move

To the point: no speculative positions.

New bitcoin derivatives might enter the U.S. market. Bitcoin binary options will be offered by Nadex conditional on the success of the companys filing with the Commodity Futures Trading Commission (CFTC), we read on PRWeb:

The North American Derivatives Exchange (Nadex), a regulated online binary options exchange, today announced it plans to launch bitcoin binary options contracts in early December, subject to filing with the Commodity Futures Trading Commission. Nadex will list the daily and weekly bitcoin binary options contracts with prices based on TeraExchanges Tera Bitcoin Price Index (TeraBit Indexsm), the global benchmark for USD/XBT contracts.

Nadex has seen strong consumer demand from retail traders looking for new ways to trade bitcoin. Similar to other binary options contracts on Nadex, investors can trade based on where they think the bitcoin binary contract is heading using daily or weekly contracts. A binary contract is one in which the payoff can take only two possible outcomes: a fixed amount or nothing at all.

Well see how the CFTC responds to the filing, but it is definitely good to see that new bitcoin-related products are being offered. While binary options are not the typical product one would choose to hedge a Bitcoin position, they might prove useful in making leveraged bets on the cryptocurrency and, as such, a vehicle for relatively experienced traders.

We would now expect other exchanges to follow suit and offer Bitcoin derivatives in the U.S. on a larger scale, just as derivatives for commodities (including precious metals) are offered. If this is the case, Bitcoin trading will become easier, particularly since derivatives might enable you to take short positions relatively easy.

For now, lets focus on the charts.

On BitStamp, yesterday was a continuation of what we had seen over a weekend. Yesterday, we wrote:

The move up we saw on Saturday and Sunday was a partial confirmation of these words as Bitcoin failed to move lower and pretty much remained in the tense area between $350 (dashed red line) and $400. Quite importantly, the volume on Saturday and Sunday was visibly lower than on Friday and the days before. This suggests that the move up might not be the beginning of a new rally, at least not now.

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Bitcoin: One tick closer to a decisive move