Bitcoin Futures’ trading has surged after the bull run within the crypto markets in the first week of 2020. The newly introduced assets reacted positively to the price movement by the underlying; this was evident across all markets that allow BTC futures.
Stats show the BTC futures’ prices were mainly influenced by the increasing market volatility, speculation on crypto prices and open interests in markets such as Bakkt. Crypto-to-crypto exchanges have since dominated the transactional volumes for BTC futures with Huobi and OKEX leading their peers. BitMex also featured in this big boys’ category.
The Bakkt market ranked well compared to peer crypto portfolios signaling higher chances of adopting BTC futures for profits. Last month, the average number of traded contracts stood at 4,107 which is roughly $32.59 million. This is still however lower than its all-time high of 6,601 contracts recorded in mid-December, 2019. It is quite notable that the open interest on BTC Futures has since gone up by 45% to hit the $9.5 million mark.
Wednesday's Bakkt Bitcoin Monthly Futures:— Bakkt Volume Bot (@BakktBot) January 9, 2020
📉 Traded contracts: 4107 ($32.59 million, -15%)
🚀 All time high: 6601 (12/18/2019)
💰 Open interest: $9.53 million (+45%)
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Bitcoin and BTC Futures Correlation
The high volatility by BTC prices poses a huge risk for futures given the underlying’s uncertainty. Investors’ reactions to abrupt market shifts can easily lead to the elimination of existing market positions; this has rendered the BTC futures highly volatile as well.
On the other hand, the futures have also been identified as predictive factors for BTC prices given some ‘gaps’ which consequently indicate probable target levels. It is however still early to tell whether the existing gaps could mean a BTC rally in the coming days. In fact, CME futures have predicted that Bitcoin will deep before pushing back to break the current resistance levels.
As it stands, BTC is well above the strong $7,900 support level although the CME predicts that this price will move down to $7,300 before reverting. The transactional volume for this leading digital asset also reduced to $24 billion in the past day. Going by these stats, BTC futures are still more volatile given their dependence on an underlying whose price can easily be altered by whales in the crypto market.