Volumes Of Bitcoin Derivatives Fall To New Lows As Volatility Crush
As market volatility remains low, trading volumes for Bitcoin futures and options contracts have decreased to all-time lows.
Predicting future prices is the main goal of bitcoin derivatives, and for this to happen, prices must typically move.
According to Glassnode, there has been less activity on derivatives markers as a result of the recent market sluggishness and weeks of inactivity.
Despite the market’s severe volatility compression at the moment, it noted that Bitcoin prices are notoriously unpredictable.
Bitcoin prices are infamously volatile, however the market is currently experiencing an extreme volatility compression. Whilst options markets reflect this, it suggests that Bitcoin is either no longer infamously volatile… or volatility could be mispriced.
The on-chain analytics firm observed that the total volume of trades in the two assets’ futures and options is at or near record lows.
A total of $19 billion is presently traded in derivatives for Bitcoin, compared to $9.2 billion each day for Ethereum markets. In the midst of the crypto winter cycle, these are lower than the January lows.
It also stated that over the past month, open interest (OI) in Bitcoin futures markets has remained constant at $12 billion. The number of contracts that have not yet been resolved is referred to as OI. Options markets, however, have risen a tiny bit and are now equal to futures in OI size.
Contrary to options contracts, which have flexible settlement dates and can be extended, futures contracts let speculators wager on the price of BTC in the future to be resolved on a specific date.
The market’s perception of implied volatility, which gauges the possibility of price fluctuations, is likewise at an all-time low. This implies that market players anticipate the lack of activity to last for a little longer.
The “DeFi Investor” reports that the volatility index for bitcoin has dropped to an all-time low.
BTC Volatility Index reached a new all-time low.
The real challenge is not surviving downtrends, but enduring the boredom of a sideways market.
The fear and greed index, which has remained neutral for the past month, is still at a neutral level.
Outlook for BTC Prices
The overall capitalisation of the cryptocurrency markets has remained constant at slightly over $1.2 trillion for yet another day. The past seven weeks have seen little change from this level.
Bitcoin fell below $29K in late trade on August 7 but quickly rose back to its sideways range, where it is currently trading at $29,150.
