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Bitcoin’s erratic price movement widens Futures spread

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Source: Unsplash

The last 24 hours for Bitcoin were not part of the script traders had in mind, especially with the halving event coming up in over a month’s time. Bitcoin’s price has dropped by a whopping 47 percent since 12 March, with the price sinking close to $3800 on the infamous Friday the 13th. However, at press time, the price had recovered to a certain degree and continued to trade at around $5400.

Source: BTC/USD on TradingView

The price movement of Bitcoin during the course of the last 24 hours also indicated a significant rise in volatility. According to data from Skew, the 3-months BTC ATM Implied Volatility showed significant variance due to the rapid fluctuation in price. The volatility rose from 66 percent to around 121 percent.

Source: skew

While the price continued to move like a rollercoaster, it is interesting to note that the Bid/Offer Spread, according to market data from skew, showed a significant rise across exchanges as the price of Bitcoin fell. On 12 March, the B/O spread for Binance rose from 3.99 percent to 10.40 percent today. A similar pattern was replicated with BitMEX in which the B/O spread saw a surge from 1.30 percent to 5.84 percent.

The increase in B/O spread indicates varying liquidity in the Bitcoin market amid increased trading volume as the price dropped and more traders sought to capitalize on the low prices.

Source: skew

For Bitcoin Futures contracts, the aggregated daily volumes showed that $35.4 billion worth of it was being traded on 12 March; which, according to the data presented on Skew, represents a very significant high in BTC’s history. Exchanges such as BitMEX and OKEx in the last 24 hours have registered around $12.7 billion and $16.2 billion, respectively.

Source: skew

Over 24 hours, Bitcoin’s price movement has resulted in a lot of volatility which led to increased trading of Bitcoin Futures. The B/O spread percentage increase also echoed a similar sentiment and as the price continues to find its footing, only time will tell when the next big price movement will be triggered.

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Jude Gerald Lopez is a full time News Editor at AMBCrypto covering the US and Indian market. He is a post-graduate in English literature with around 4 years of teaching experience in Indian literature.