Bitcoin Futures Trading Trends
The cryptocurrency market is witnessing significant trends in Bitcoin futures trading, which suggests increased market participation and potential institutional interest in Bitcoin. According to recent data from Deribit and the Chicago Mercantile Exchange (CME), these trends are quite notable.
Record High in Bitcoin Perpetual Futures
Open interest in Bitcoin perpetual futures on the Deribit derivatives exchange has reached a yearly high of $740 million, indicating growing participation and potential liquidity which suggests that new money is entering the market. This was last seen in November 2021 when Bitcoin reached its all-time high.
CME Bitcoin Futures Premium
There’s been a noticeable premium on CME Bitcoin futures contracts, which is seen as an indicator of increased institutional participation. This was observed by Justin d’Anethan, Head of Business Development for APAC at Keyrock, showing significant interest from sophisticated investors in gaining exposure to Bitcoin.
Supporting Data from The Block
Data Dashboard from The Block corroborates this, showing an all-time high for CME Bitcoin long open interest by asset managers, revealing nearly $2.2 billion in Bitcoin long open interest held by these institutional players.
Anticipation of Spot Bitcoin ETF Decision
The current market dynamics are likely influenced by the anticipation of a decision on spot Bitcoin ETFs, expected by mid to end of January. This anticipation is creating pressure on investors who are attempting to front-run the potential influx of capital into the Bitcoin market following the introduction of an easier investment vehicle.
Cautionary Note on Market Volatility
Despite the positive indicators, a cautionary note is offered regarding the crypto market’s unpredictability. It is conceivable that significant players might drive prices lower, potentially triggering leveraged long liquidations.
Bitcoin’s Current Market Performance
At the time of writing, Bitcoin is trading at around $41,652, up 5.13% in the past 24-hour period and up 150.38% in the year-to-date period. The rally is often driven by leveraged traders in the perpetual futures market.
Hot Take
Credible Crypto presents a 12-minute video to discuss recent Bitcoin price action, noting that the current rally in the Bitcoin market might not be the most stable foundation for a sustained uptrend. However, he anticipates a shift where consistently high funding rates and perpetual futures leading the market become the norm, as typically seen in full-fledged bull markets. There seems to be support from spot market buyers, as they are subtly absorbing sell orders during consolidations, preventing any significant price drops.
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