CME Bitcoin Futures Spread Hits Lowest Since Last November … Reflects Weaker Trump Expectations

# CME Bitcoin Futures Spread Plummets to Lowest Since November, Indicating Weakening Market Sentiment # CME Bitcoin Futures Spread Drops Sharply The spread between the near-month and next-month contracts of CME Bitcoin futures has narrowed to $495, marking the lowest point since November 5 of last year, according to TradingView data cited by CoinDesk on March 12. This is a significant drop from the peak of $1,705 recorded on December 17, indicating a major shift in market sentiment that was buoyed post-President Trump’s election victory. # Diminished "Trump Rally" and Weakened Bullish Sentiment The tightening of the futures spread suggests that the "Trump rally" has fully abated, underlining a weakening bullish sentiment in the market. Commenting on this trend, Thomas Erdosi, Head of Product at CF Benchmarks, noted, "The narrower spread between near-month and next-month CME Bitcoin futures could signify that traders are lowering their price expectations.” # Fading Enthusiasm Over Pro-Crypto Policies The reduction in futures spread reflects a decline in the crypto sector’s optimism about Trump's policies. "Short-term expectations in the Bitcoin futures market have significantly declined," noted Erdosi. "This implies that the optimism surrounding Trump’s election, a key driver behind the recent rally, is now fully priced in." # Bitcoin Price Decline Since early February, Bitcoin has fallen by 20%, while the NASDAQ index has dropped by 8% over the same period. Analysts attribute this to various factors, including geopolitical uncertainties, Trump’s tariff policies, and concerns over inflation and economic growth forecasts. # Disappointment in Trump's "Strategic Bitcoin Reserve Plan" There was initial market excitement over rumors that the Trump administration might purchase new Bitcoin under its "Strategic Bitcoin Reserve Plan." However, the recently announced plan fell short of expectations. President Trump issued an executive order instructing the strategic reserve of seized Bitcoin, but it did not include plans for new purchases, leading to market disappointment. Ian Balina, CEO of Token Metrics, remarked, "The market anticipated that the strategic reserve plan would involve new purchases, but the government only announced the maintenance of existing holdings. This is a positive step but one that has nonetheless triggered a price decline." # Bitcoin Futures Market Still in Contango Despite the narrowing spread, the overall curve of CME Bitcoin futures remains in a state of contango. Contango occurs when long-term futures prices are higher than short-term ones, usually reflecting factors such as storage costs, financing costs, insurance premiums, and long-term price increase expectations. Analyzing this situation, Erdosi commented, "Considering that funding rates for perpetual futures contracts are still positive and the futures market maintains a contango position, the recent decline is likely due to spot buyers without leverage getting liquidated." # Bitcoin Price Update As of 9:24 a.m. on March 12, New York time, Bitcoin was trading at $83,397 on CoinMarketCap, up 2.71% from the previous 24 hours. Bitcoin advanced to $84,358 after the release of the U.S. February Consumer Price Index (CPI) which came in below expectations, but it retreated most of its gains shortly thereafter. Bitcoin is undergoing a correction after reaching a new all-time high of $109,114 on January 20.