Bitcoin Futures Open Interest Hits $19 Billion, Harsh Intraday Swings, Analyst Says 'Fresh Rally' Expected

The start of the week saw digital currency markets drop significantly in value, as billions of dollars were shaved off the entire crypto economy’s capitalization. A weekly report from Luno and Arcane Research shows February 23 captured the third-largest bitcoin daily trade volume in crypto history, as spot market volume saw $18 billion change hands. Moreover, crypto derivatives are surging as bitcoin futures open interest commandeered $19.1 billion on Tuesday.

Volatile Bitcoin Price Fluctuations Sees Intraday Swings Close to 20% for Two Days In a Row

After bitcoin (BTC) touched an all-time price high on Sunday, hitting $58,354 per unit, bitcoin’s value slipped below the $50k handle touching bottom at $44,846 per coin. The loss between these two price ranges saw over 23% shaved off BTC’s market valuation.

While heavy losses were seen across the board throughout the entire crypto-economy, a report from Luno and Arcane Research shows that Tuesday’s trade volume was the third-largest ever seen. The digital asset’s intraday moves had shown the crypto asset’s price fluctuations have been more erratic. In fact, Luno’s report shows intraday moves of close to 20% happened two days in a row.

Bitcoin Futures Open Interest Hits $19 Billion, Harsh Intraday Swings, Analyst Says 'Fresh Rally' Expected

“The beginning of the week has been more volatile than usual, with both Monday and Tuesday seeing intraday moves of 18%,†the study notes. “Bitcoin dropped from $57k to $46k yesterday before recovering to $54k. This volatility continued this morning, as BTC dropped from the opening around $54k and all the way down to $45k. This is not reflected in the daily volatility metrics yet, as they’re based on daily close prices,†the report adds.

Bitcoin Futures Open Interest Hits $19 Billion, Harsh Intraday Swings, Analyst Says 'Fresh Rally' Expected

Luno’s report says that traders should be “very careful with leveraged positions, both longs and shorts.†It also said that bitcoin derivatives have been “snowballing in the bitcoin market†and had “peaked at $19.1 billion this Sunday.†“Yesterday’s sell-off pulled out some steam from the leveraged futures market, but the climate is still hot,†Luno’s study emphasizes.

Bull Market Could See a ‘Stronger Rally,’ Cooling Down the Feverish Derivatives Markets

Pankaj Balani, CEO of Delta Exchange, a digital asset derivatives trading platform says the recent bitcoin (BTC) correction was healthy.

“Despite the correction,†Balani said in a note to investors. “The bull market and the case for a stronger rally in bitcoin remains intact. This is only the second correction in BTC prices since November, when bitcoin broke above its previous ATH and started a fresh rally. The 2017 bull market saw bitcoin correct 25%-35% multiple times before reaching its peak in January of 2018,†the Delta Exchange added. Balani expects a “short-term consolidation†in BTC’s prices for now.

The findings in Luno and Arcane Research show that between February 1 to Feb. 22nd, bitcoin futures open interest (OI) climbed by 63% outpacing BTC’s price rise which was only 57%.

“The open interest outpacing the bitcoin performance should be a concerning sign as it shows that the leverage $10 [billion] is picking up,†Luno said. “While the OI is a result of both longs and shorts, the huge premiums in the futures market lately indicate that leveraged upside exposure has $5b been the main contributor to the rising OI. It would be a healthy sign going forward if the futures market’s growth takes a breather,†the report added.

The dramatic BTC derivatives fever has seemingly cooled down as Luno and Arcane’s findings show some of the futures OI had dissipated following the sell-off.

“The funding rates have returned to neutral territory, and the market seems healthier,†Arcane Research’s weekly note to investors said this week. For now, bitcoin traders are changing positions and strategies after the dump, and focusing on BTC’s next big move.

What do you think about bitcoin spot market volumes rising and the feverish bitcoin derivatives markets? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

RELATED NEWS

Another South African Company Reveals Plans to List a Crypto ETF on Local Stock Exchange

Fresh reports from South Africa suggest another local company, Sygnia, is set to apply to the Johannesburg Stock Exchange (JSE) to list a new cryptocurrency exchange-traded fund (ETF). This application will be the second time Sygnia has attempted to list the crypto ETF. A similar application in 2017 was rejected by JSE on grounds that […]

Xem chi tiết: Another South African Company Reveals Plans to List a Crypto ETF on Local Stock Exchange

The Ternoa Blockchain (CAPS) Unveils SecretNFT, Its NFT Platform

sponsored The Ternoa Blockchain has just unveiled the alpha version of its SecretNFT Marketplace, a platform entirely dedicated to non-fungible tokens (NFTs). The platform, which uses Ternoa’s own CAPS token, comes with many features to promote its adoption among artists and lovers of NFTs. Ternoa launches its NFT platform, SecretNFT The Ternoa Blockchain has just […]

Xem chi tiết: The Ternoa Blockchain (CAPS) Unveils SecretNFT, Its NFT Platform

Crypto Fraud Reports in South Korea Surged Over 41% in 2020, Says Financial Watchdog

Although bitcoin prices plummeted over the weekend, the overall bull-run remains alive, as well as the crypto-related fraud cases in South Korea. The latest figures by the domestic financial watchdog show that such incidents are still on the rise. Police to Dedicate a Special Unit to Investigate Crypto Frauds According to Asia Kyungjae, the Financial […]

Xem chi tiết: Crypto Fraud Reports in South Korea Surged Over 41% in 2020, Says Financial Watchdog

Nigeria Money Printing Controvesy: CBN Governor’s Remarks Attacked, Government Denies It Financed Deficit via Money Printing

The fallout sparked by reports that the Central Bank of Nigeria (CBN) printed over $150 million for states’ funding continued a few days after the allegations were initially made. In the latest twist, the opposition People’s Democratic Party (PDP) vice-chairman Dan Orbih said the CBN governor Godwin Emefiele’s response to the allegations is “politically motivated.†[…]

Xem chi tiết: Nigeria Money Printing Controvesy: CBN Governor’s Remarks Attacked, Government Denies It Financed Deficit via Money Printing

2 Cents per Kilowatt Hour: Bitfarms to Launch a 210 MW Bitcoin Mining Operation in Argentina

The Canadian publicly traded bitcoin mining company Bitfarms has announced a deal that will see the company developing a 210 megawatt (MW) mining farm in Argentina. Bitfarms says that the company was able to secure a low electricity rate at $0.02 per kWh during the contractual period. Argentine-Based Bitcoin Mining Facility Aims to Acquire 210 […]

Xem chi tiết: 2 Cents per Kilowatt Hour: Bitfarms to Launch a 210 MW Bitcoin Mining Operation in Argentina

Former Comptroller of the Currency Brian Brooks to Lead Binance’s US Trading Platform

A former top regulator and acting head of the U.S. Comptroller of the Currency, Brian Brooks has been appointed the CEO of crypto exchange Binance.us. Brooks will lead the exchange on May 1st and replace the company’s current lead, Catherine Coley. Binance has hired an individual with ties to Washington, as the company’s American trading […]

Xem chi tiết: Former Comptroller of the Currency Brian Brooks to Lead Binance’s US Trading Platform

B2Broker Continues to Work Hard to Deliver a Full Suite of Technology and Liquidity Solutions

press release PRESS RELEASE. B2Broker is a technology and liquidity provider serving clients in the crypto and foreign exchange (FX) industry with over 165 employees worldwide. Since setting out in 2014, the company has secured some of the most well-known global clients in the financial services industry, resulting in over 350 institutional customers to date. […]

Xem chi tiết: B2Broker Continues to Work Hard to Deliver a Full Suite of Technology and Liquidity Solutions

Communist Party of Cuba Suggests Including Cryptocurrencies as an Alternative to Deal With Economic Crisis

When a country faces a severe economic crisis or living in a long-lasting political turmoil, cryptocurrencies are often discussed as an alternative to deal with the tough times. Although cryptos are not an unfamiliar issue in Cuba, the Communist Party of Cuba (PCC) has been recently showing interest in digital assets to face the economic […]

Xem chi tiết: Communist Party of Cuba Suggests Including Cryptocurrencies as an Alternative to Deal With Economic Crisis

Shapeshift Reveals Platform Supports Unwrapped Swaps via Thorchain With No KYC

Biden Administration Developing Cryptocurrency Regulation — Treasury to Provide Direction to SEC

Paypal’s Venmo Launches Crypto Trading for 70 Million Users to Buy and Sell Cryptocurrencies

Digital Money 2025: What You Could Spend, Where You Could Invest, and How You Could Borrow?

South African Crypto Platform Revix Raises $4.1 Million

Ukrainian Parliament Passes Bill That Criminalizes People Who Don’t Reveal Crypto Holdings

ODDZ Listing on AscendEX

Oracle Service API3 Partners With the Open Banking Project, Plans to Connect 400 Banking APIs to Blockchain