After an agonizing 35% loss in the past 24-hours, Bitcoin (BTC) finally bounced at $30,000 earlier today in the May 19 trading session. A total of $3.5 billion in liquidations took place, which might have accelerated the movement, but they can't really be entirely blamed for the move. However, the weakness in derivatives markets did give some strong signals that panic was instilled, causing unsustainable levels. These can be measured by the price gap between the futures markets and regular spot exchanges, along with the negative funding rate on perpetual contracts. Multiple culprits catalyzed the drop, including Elon Musk, Tether …

Amid Bitcoin touching five-month lows near $30,000, JPMorgan Chase analysts suggested that large institutional investors are now dumping Bitcoin (BTC) in favor of gold. In its Tuesday note to clients, JPMorgan suggested that institutional investors are going back to gold, reversing a major bullish cryptocurrency market action that drove Bitcoin's price above $64,000 in mid-April. Citing open interest data in Bitcoin futures contracts on the Chicago Mercantile Exchange, the American megabank said that BTC futures now saw the first biggest decline since the bull market that started in late 2020: “The bitcoin flow picture continues to deteriorate and is pointing …

Bitcoin's 51.4% crash in March 2020 was the most horrific 24-hour black swan event in the digital asset's history. The recent price activity of the past week has probably resurrected similar emotions for investors who experienced the Black Thursday crash. Over the past week, Bitcoin's (BTC) price dropped 29% to reach a three-month low at $42,150. $5.5 billion in long contracts were liquidated, which is undoubtedly a record-high in absolute terms. Still, the impact of the March 2020 crash on derivatives was orders of magnitude higher. To understand why the current correction is less severe than the one in March …

Historically, activity surrounding the Bitcoin (BTC) monthly futures and options expiry has been blamed for weakening bullish momentum. A few studies from 2019 found a 2.3% average drop in BTC price 40 hours before the CME futures settlement date. However, as Cointelegraph reported in June 2020, the effect faded away. While 2020 seems to have rejected the potential negative impact of CME expiries, so far, the current year appears to validate the theory. Bitcoin’s price has been suppressed ahead of futures and options expiry in the first three months of 2021. Some investors and traders have pointed out that Bitcoin’s …

The United States Securities and Exchange Commission, or SEC, has issued an investor warning pointing out risks of mutual funds that have exposure to Bitcoin (BTC) futures. In an official statement on Tuesday, the SEC strongly encouraged investors to thoroughly consider risks disclosure of a mutual fund on the Bitcoin futures market, stressing that Bitcoin is a “highly speculative investment.” The authority emphasized that investors should take into account the volatility of both Bitcoin and the Bitcoin futures market, as well as the lack of regulation and potential fraud or manipulation in the underlying Bitcoin market. “As with any fund …

In the past 30 days, Ether (ETH) price decoupled from Bitcoin (BTC) to post a 67.5% gain, while the leading cryptocurrency price has barely moved. Ether's $3,605 all-time high on May 5 was responsible for boosting the asset's futures open interest to $10 billion. This movement brings up some crucial questions as the dominance of Bitcoin's derivatives markets appears to be challenged at the moment. On May 4, Ether's aggregate futures volumes surpassed Bitcoin's for the first time in history. Volume data from Coinalyze shows that $2.6 billion CME Bitcoin futures traded, along with $1.1 billion in CME Ether futures …

The Chicago Mercantile Exchange, or CME, has officially launched its newest Bitcoin (BTC) derivatives product, setting the stage for wider mainstream adoption of digital assets. TIm McCourt, CME Group’s global head of equity index and alternative investment products, said the new product will provide “an efficient, cost-effective way for a broad array of market participants — from institutions to sophisticated, active traders — to fine-tune their bitcoin exposure and enhance their trading strategies.” The Micro Bitcoin futures contract is worth 0.1 BTC, which provides traders with an additional tool to hedge their digital currency price risk. J. B. Mackenzie, managing …

Bitcoin and the overall cryptocurrency market saw minor losses on April 29 as the market heads into the expiry of $4.2 billion worth of (BTC) options contracts. Data from Cointelegraph Markets and TradingView shows that since reaching a high above $56,400 on April 28, the price of Bitcoin has dropped more than 6% back down near the $53,000 support level while Ethereum (ETH) continues to trade above $2,700. Despite the lull in market activity, signs of mainstream cryptocurrency integration continue to emerge on a near-daily basis. Earlier today Coinbase announced that users can now purchase up to $25,000 worth of …

Roughly $150 million worth of shorts were liquidated within a span of hours as the price of Bitcoin (BTC) rose from around $47,000 to over $53,000 on Monday. The cryptocurrency market as a whole saw a strong short squeeze, as Ether (ETH), Binance Coin (BNB) and other major cryptocurrencies also rose by around 15% in the same period. Following Bitcoin’s 12% recovery within a single day, the futures market has completely reset, with funding rates hovering at neutral levels. Why today’s Bitcoin short squeeze is bullish A short squeeze in trading refers to when short-sell orders in the futures market …

In the past two years futures contracts have become widely popular among cryptocurrency traders and this became more evident as the total open interest on derivatives more than doubled in three months. Additional proof of their popularity came as futures turnover surpassed gold, which is a well-established market with $107 billion in daily volume. However, each exchange has its own orderbook, index calculation, leverage limits and rules for cross and isolated margin. These differences might seem superficial at first, but they can make a huge difference depending a traders' needs. Open interest As shown in the above, the total aggregate …

As Bitcoin (BTC) lost the $52,000 support on April 22, the futures contracts funding rate entered negative terrain. This uncommon situation causes the shorts, investors betting on price downside, to pay fees every eight hours. While the rate itself is mildly damaging, this situation creates incentives for arbitrage desks and market makers to buy perpetual contracts (inverse swaps) while simultaneously selling the future monthly contracts. The cheaper it is for long-term leverage, the higher the incentives for bulls to open positions, creating a perfect "bear trap." The above chart shows how unusual a negative funding rate is, and typically it …

The price of Bitcoin (BTC) is still stuck in what traders hope will be a short-term downtrend as the impact of the April 18 rumors of a crackdown on “unnamed financial institutions” for facilitating money laundering using cryptocurrencies has yet to be shaken off. Data from Cointelegraph Markets and TradingView shows that since being pummeled below the $51,000 level on April 18, the price of BTC has been trading in a range between $52,500 and $57,500 and establishing a descending pattern of lower highs and lower lows. While regulatory concerns may have played some role in the current drawdown, there …