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Bitcoin’s price breakout also boosts futures trading – with $ 10K in range

Bitcoin's price breakout also boosts futures trading - with $ 10K in range


Bitcoin’s January 2020 performance is one for the books: Suddenly, the main cryptocurrency has been revived. In the fourth quarter of 2019, BTC was still faced with flat trading and declining trends. Several factors are associated with this increase in the new year – and one of them is the increased interest in trading in derivatives.

Trading futures has become big business for Bitcoin – great interest from institutional platforms such as CME and Bakkt, and futures and options trading has also been introduced on the Chicago-based exchange. In addition, increased futures trading on exchanges such as OKEx, Binance and BitMEX has resulted in the market exceeding $ 20 billion twice this year.

The recent surge in bitcoin prices to over $ 9,000 has also affected the volume of futures trading. That slowly slowed down after rising to $ 25 billion on January 14. In the past four days, the volume has climbed steadily to meet the growing price of the coin.

Excitement in the Bitcoin market

Bitcoin’s price has moved from $ 7,180 to a high of $ 9,385 in the past 29 days. This is significant and unusual, as the first quarter has traditionally been rather bad for Bitcoin. Since 2014, Q1 returns for Bitcoin have not only been weak, there have only been two years in the green.

The market excitement may well be due to the expanding ecosystem of derivatives trading. This snowball effect is not uncommon in the cryptocurrency space and has been observed on Google searches. They help to increase the price of Bitcoin – but also increase when the Bitcoin price increases.

With the past four days on the futures market all trending up, there’s a sense of expectation – especially with the $ 10,000 mark in mind. This “half time” on Bitcoin’s path to an all-time high is of tremendous sentimental value to traders, and the increased trading volume in futures could point in this direction.

Will there be more on Friday?

It is also important to note the impact that the derivatives market can have on the Bitcoin market. This is because not only large institutions like CME can move the markets with large open positions, but also Bitcoin whales on cryptocurrency forwards platforms.

Friday, the end of the month, will be an important date for the futures market. It could have a volatile effect on the Bitcoin price if an expiration date approaches. Not only that, part of the reason for growth in futures trading is the continuously increasing open interest on BitMEX.

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