Bitcoin: futures volumes set new records
Bitcoin: futures volumes set new records

Bitcoin: futures volumes set new records

By Federico Izzi - 30 Apr 2020

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The record volumes of Bitcoin, which yesterday saw 3.4 billion traded in dollars, are also reflected in the institutional market as demonstrated by the volumes on futures and open interest on CME and Bakkt. 

The futures of the CME yesterday have almost reached the record of last Thursday at 485 million in dollars: 467 million were touched yesterday, the second-highest weekly. The open interest on the CME exceeded 300 million dollars, 301 million to be precise, the highest record in recent months. A higher level was recorded at the beginning of March.

Also on Bakkt, the volumes on physically settled futures were 20 million, on cash-settled, on the other hand, they reached 7.5 million, for a total slightly lower than the record set on April 20th as far as the futures traded on Bakkt are concerned. The open interest on Bakkt yesterday closed at $8.5 million, a higher level that was not recorded here since the beginning of March. 

This indicates how yesterday was a particularly euphoric and eventful day that has stirred up large capital but unlike March this is happening on a bullish movement.

In March instead, we were already within a bearish trend that then exploded with the collapse of Ethereum on March 8th and on Bitcoin on March 12th and 13th, marking the mid-month lows.

The record on Bitcoin is due to the halving

This attention is due to the particular moment that will happen in the coming days between May 10th and 11th, when there will be the next Bitcoin halving. This would be the first time for institutional investors, who could enter this sector at such a particular and delicate historical moment, completely different from the two previous halving.

In previous weeks there were indications that institutional investors were taking positions. When there is an increase in open interest, it means that long and buying positions are prevailing. Already on April 24th, the levels of volumes prior to the March collapse were returning to the CME. Yesterday there was a further boost.

These are signals that confirm how these days are causing a halving fever. Now it is necessary to understand how this halving will take place and the movements on the part of the miners who will see their rewards halved in two weeks’ time. 

History says that both halvings have given a bullish force to Bitcoin that in the following months has increased the prices between 2000 and 3000%. Expectations are that history will repeat itself but history teaches that past events do not always have consequences for future ones. 

In any case, these are euphoric events where the trading volumes like those of yesterday can be seen in a context similar to that of March, when, however, there was fear and selling, it was a “throw the baby out with the bathwater” due to the fear of collapses. Whereas with the FOMO there is the fear of not being able to get on a train that seems to be running.

Yesterday, Binance, which is one of the world’s leading exchanges, second only to Coinbase, saw trading volumes worth 11 billion dollars on Bitcoin. CZ commented that it is the highest trading volume since January 2018. 

This confirms that both at the institutional level through instruments offered by CME and Bakkt, and different tools like Binance show new records. 

Price variances of $1,000 in 24 hours bring back ghosts of the past, as they did in late 2017. But in phases of extreme euphoria, it is always good to never take too much risk that goes beyond one’s ability to manage and hold capital and the portfolio itself. It is always better to anticipate euphoria than to board a moving train


Federico Izzi

Financial analyst and independent #trader – S.I.A.T. & partner. He operates actively on stock and derivatives markets (futures and options) since 1997. A precursor of cyclic-volumetric analysis he is known for having identified the most important upward and downward movements in the financial markets of recent years. He participates annually as a speaker at the ITForum in Rimini since the 2010 edition and InvestingRoma and Napoli since the first edition of 2015. He is a guest and market expert on the "Trading Room" and "Market Driver" broadcasts of Class CNBC, Borsa and on the evening news of Traderlink. Since July 2017 he is a permanent guest on LeFonti.TV, the only weekly national space dedicated to cryptocurrencies alongside the most important international experts in the field. He was interviewed as a cryptocurrency expert for Forbes Italia, Panorama, StartupItalia and DonnaModerna. He was recognized as the first Italian technical analyst to have published the first secular cyclic analysis on Bitcoin. Periodically publishes articles on ITForum News, Sole24Ore, MILANOFINANZA, TrendOnLine and Wall Street Italy. Federico Izzi is... "Zio Romolo".

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