- Bitcoin futures trading dominated the market and outweighed spot trading volume.
- The current Bitcoin Volatility Index indicated high volatility, with traders taking long and short positions.
New statistics shed light on the sheer amount of trading activity in both Bitcoin [BTC] spots and futures markets. The statistics suggested that BTC volatility could surge. Taking a closer look at the current discrepancy and assessing the BTC volatility index can help better understand the current situation.
Read Bitcoin (BTC) Price Prediction 2023-24
Bitcoin futures outperform spots
According to a report by CryptoQuant, the current trading volume for futures was greater than the trading volume for the spot market. The most recent data on Bitcoin’s spot and futures trading volumes indicated a significant difference.
Source: CryptoQuant
At the time of writing, the chart revealed that spot market trading volume was just 35,000, while derivatives trading volume exceeded 369,000. On April 28, the situation was even more pronounced, with spot trading volume hovering around 92,000 while derivatives trading volume reached almost 900,000.
These numbers indicated the predominance of futures trading in the BTC market, making the market more responsive to price fluctuations.
In Bitcoin trading, the spot market is the conventional method where individuals can buy or sell BTC directly. On the other hand, the futures market is where investors speculate on the future value of BTC.
Unlike the spot market, where one owns Bitcoin outright, futures traders enter into a contract to buy or sell Bitcoin at a predetermined price on a specific date in the future.
Current Bitcoin Volatility Measure
According to data from Glassnode, the current Bitcoin Volatility Index has crossed the 60% mark. It stood at 67.8% at the time of writing, indicating a possible upward trend in volatility.
The chart registered two significant peaks in the index in 2023 – on February 5th by a whopping 93% and on April 10th by 83%.
Source: Glassnode
The BTC Volatility Index is a crucial metric that measures the extent of fluctuations in the price of BTC over time.
It is derived from the implied volatility of Bitcoin options, which are financial instruments that give the holder the right, but not the obligation, to buy or sell BTC at a predetermined price and time.
How much are 1,10,100 BTC worth today
Long vs short
Coinglass data indicated that traders were actively taking long and short positions in response to BTC’s current volatility. At the time of writing, the percentage of long positions stood at 50.4%, while short positions accounted for 49.6%, indicating an almost equal split between the two.
Moreover, at the time of writing, BTC was trading around USD 29,200, with a slight gain. Traders are strategically responding to the recent volatility in the Bitcoin market, seeking to maximize profits while minimizing risk.
Source: Coinglass
