Bitcoin Futures market sees increased turbulence as instability looms large

Bitcoin’s price has been revolving around the $7k mark for a couple of weeks now. Every time the coin breaches the $7k, it has been met with extreme selling pressure, dragging down its value. However, on 16 April the coin, once again, surpassed the $7k market and has not yet dropped. But the price has been close to the resistance, at $7,047.69, at press time. Despite a strong recovery effort, the Bitcoin futures market has been turning unstable, as per Arcane’s observations.

The BTC futures market managed to bounce back from the major fall on 12 March and appeared in great form until last week. Nevertheless, the beginning of this week caused turbulence in the market as the premiums have been falling. The Chicago Mercantile Exchange [CME] reported great momentum from the traders with a more bullish outlook than retail, although a falling premium was reported there as well.

Source: Arcane

The overall futures premiums have been sloping down since the beginning of February. The premium rates on CME have been expected to fall to 0.71% till June 2020, but may rise by September 2020. Similarly, the average premiums of BitMEX, Deribit, FTX, and Kraken might reach 0.04% by June.

While, CME noted a significant recovery from one of the major market hits, Bakkt, on the other hand, did not. Instead, its Open Interest has fallen from $19 million in February to $6 million in April. This month also saw the expiration of contracts that was followed by a massive pullback from previous months in 2020. According to data provided by Arcane, 60% BTC contracts held to expiry dropped in April and was down to 117. This equated to 54% in USD value.

Source: Arcane

This highlighted the passive participation from the institutional investors as uncertainty still at large.

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