Yesterday was a volatile one, even by the cryptocurrency market’s standards. Not only did prices of leading digital currencies skyrocket but traders also flocked to trade derivative products associated with Bitcoin (BTC).
As highlighted by cryptocurrency market analysis firm Skew, yesterday saw more interest in Bitcoin futures contracts that any other day since October 26. According to the company’s data, more than $25 billion worth of contracts changed hands on January 14.
Yesterday's was most active session this year for bitcoin futures and busiest since 26th of October
$25bln+ going through on our radar pic.twitter.com/LrwGCNQ21M
— skew (@skewdotcom) January 15, 2020
BeInCrypto reported yesterday that open interest across major exchanges offering Bitcoin futures hit $3 billion. The figure continued to grow since that report went live and currently stands close to $3.5 billion. As highlighted in the article, open interest alone does not indicate the direction a market will take. However, some traders argue that a large growth in open interest suggests a trend will continue. With Bitcoin moving from the low $7,000 price range to more than $8,700 at the time of writing, the clear trend at the moment is upwards.
As mentioned above, the last time that Bitcoin futures trading saw such volume was in October of last year. Skew highlights October 26, the day after Chinese President Xi Jinping formally acknowledged blockchain technology and said that China should become a world leader in distributed LEDGER systems, as being the last day to surpass the BTC futures volume seen yesterday. On October 25, the price of Bitcoin pumped hard. As BeInCrypto reported at the time, the BTC price actually jumped 12 percent in just one hour.
It comes as little surprise to see Bitcoin futures trading volume soar on days of high volatility in the cryptocurrency market. After all, volatility is where the money is made in trading. It stands to reason that those choosing to trade futures on an asset like Bitcoin, which is known for dramatic price action, would be particularly fond of such volatility. Massive price shifts over the course of just hours are still common in the market. This makes for a substantial opportunity for profits if entries and exits are timed well enough.
Images courtesy of Shutterstock, Trading View and Twitter.
