Bitcoins on derivatives exchanges at their highest since May 19
Bitcoin on derivatives exchanges is at its highest level since May 19, signaling a volatile weekend ahead.
Historically, derivatives exchanges like Binance Futures, BitFinex, and BitMEX are capable of creating massive price movements (a single entity or a group of entities can create huge swings using a relatively small number of coins) thanks to providing massive amounts of leverage. These exchanges allow margin trading with leverage even greater than 100X.
Bitcoin had already experienced high volatility in the past 24 hours, following a 6% price drop, recording a 5-day low below $ 34,000, at the time of writing.
- Market manipulation is still rampant in the cryptocurrency market, both at the exchange level and in the sphere of public awareness, as famous figures in the cryptocurrency space have created shockwaves through the Bitcoin ecosystem with big announcements throughout May.
- May 19, 2021 was a day of massive volatility where BTC briefly fell below $ 30,000. It was bounded by a large number of bitcoins on derivatives exchanges, as can be seen in the following chart, presumably allowing whales to create large swings.
- Notably, spot exchanges also saw a massive influx of bitcoin on the 19th. On spot exchanges, bitcoins can only be used to create downward pressure (without derivatives, BTC cannot be sold and cannot be sold. not be used to create leveraged long positions).
- Although the volume of derivatives is about to climb, indicated by the influx of bitcoins into the derivatives exchange, the similar inflow has not been noticed on spot exchanges (bitcoins on these are still at relatively low levels compared to the 19th).
- This aligns with the volatile Saturday we are already seeing, when we can expect further volatility in the short term.
- The coming days are likely to have huge fluctuations, with volume coming from both directions. Considering the relatively small number of bitcoins on spot exchanges, the net move may not necessarily be bearish at all, as of now.
FREE Binance Futures 50 USDT Voucher: Use this link to sign up and get 10% fee discount and 50 USDT when trading 500 USDT (limited offer).
PrimeXBT Special Offer: Use this link to register and enter the code POTATO50 to get a 50% free bonus on any deposit up to 1 BTC.