- Futures premium rates rise while BTC price falling
- Binance futures volume doubles in 24 hrs, Open interest on Bakkt goes parabolic
- Futures are required for the market, they provide exits for institutional investors
- Bakkt CEO getting appointed to the US Senate is “really really really good for Bitcoin”
- Bitcoin is stuck just above $7,000.
Yesterday, we surged over 9% only to come back down to $7,150 level before BTC climbed to $7,500 yet again.
Bitcoin has been unable to maintain this spike in price because of the lack of volume. Earlier this week, less than $200 million BTC changed hand in ten exchanges with real volume.
The low volume across exchanges during this sudden movement according to Mati Greenspan founder of the newsletter Quantum Economics, “points to the assumption that this was the outcome of a single player with a large buy order. Or in other words… a large whale stacking sats.”
Currently, BTC/USD is trading at $7,323, as per Coincodex while managing the daily trading volume of just above $380 million.
Premium Rates Rising, Binance Futures Volume Doubles
While BTC price on spot exchanges have taken a beating, the premium rates on BTC March 2020 contracts have been increasing.
The futures premium from Nov. 29 to Dec. 2 increased 30%, an uncommon observation, while during the same period BTC price was down 6%.
Interestingly, the volume of the Bitcoin futures market is also seeing a significant increase as well. Binance futures volume doubled within 24 hours, going above $2 billion mark, as per CoinGecko.
Bakkt is also seeing record volume. After making the all-time high on Nov. 27 at 5671 BTC volume, on Dec. 4, though not a new high, Bakkt registered 3784 BTC in volume.
However, the most interesting thing is the open interest which skyrocketed. During the week of the peak volume, open interest ended at 889 BTC, an increase of 798% over the previous week.
It needs to be noted that no trades have been done for the daily BTC futures contest over the last two months.
Don’t be afraid of the Futures
According to some researchers, Bitcoin Futures have been that led to the crash of the 2017 bull market as CME and the Cboe were the first ones to launch BTC futures around the peak.
But popular analyst PlanB who is known for applying the stock-to-flow model to Bitcoin, says futures were that normalized the market.
The analyst conducted a poll on Twitter asking what could push BTC price down. 42% voted for futures/manipulation while miner capitulation and TokenPlus Sale got 15 and 14% respectively.
In Dec 2017, BTC price, he says jumped out of the prediction bands of S2F model that had the rubber band stretched to the max. This needed to revert and futures were the trigger that the market needed.
“Futures have brought ratio back to this market at peak FOMO in Dec 2017! Yes short term manipulation with futures is possible, like in gold markets, stop loss hunting with spoofing. But long term futures provide exits for institutional investors!”
Really really really good for Bitcoin…
In another positive news, Kelly Loeffler, the CEO of Bakkt has been officially appointed to the US Senate by the Georgia Governor Brian Kemp.
Greenspan called this “really really really good for Bitcoin” because she is “probably the most influential person in the crypto space.”