• Blog
  • News
  • Bitcoin Futures Premium Has Dropped: How Can Traders Use This To Their Advantage?
News

Bitcoin Futures Premium Has Dropped: How Can Traders Use This To Their Advantage?

Bitcoin price consolidation has played into the hands of those who have long wanted but did not dare to enter the crypto market. Volatility is rising, premiums on BTC and GBTC futures are falling – is Bitcoin getting ready for a big bull run?

“If you don’t make it, you’re late”

As expected, the closure of Bitcoin options contracts on the last Friday of September was the impetus for rising cryptocurrency volatility. Analysts saw a positive trend on the BTC technical charts, which could indicate a continuation of the bull market. Today, Bitcoin is at the stage of completing the price correction: the crypto asset has already approached the $11,000 level several times. Despite a pullback, the flagship cryptocurrency is showing positive price movements in 24-hour trading sessions.

The long-term consolidation of Bitcoin in the $10,000 range has allowed crypto enthusiasts to buy a crypto asset at a bargain price. As a result of the volatility of the BTC exchange rate, the premium for December Bitcoin futures has also decreased. It played into the hands of traders as they got an unprecedented opportunity to enter the crypto market ahead of the projected rally in the flagship crypto.

BTC futures premium declined

Today, the focus is on Bitcoin futures, which expire in December. On crypto-exchanges, there is a tendency towards a decrease in the premium for these contracts. The exception is Chicago Mercantile Exchange (CME), where the premium for December Bitcoin futures is at a fairly high level and is 6.28%. It indicates that large institutional investors believe in a bull market and a significant increase in the price of Bitcoin until the end of 2020.

Analysts also see a positive trend in reducing the premium on GBTC shares to 6%. Shares owned by Grayscale Investment are often used to predict the price of Bitcoin. Ian Dyer, a financial expert, noted that the GBTC price is declining amid the Bitcoin price consolidation ahead of the upcoming rally.

Also, one of the analysts wrote on Twitter:

The decline in the GBTC premium can be viewed as an optimistic signal for Bitcoin. I am not yet so friendly towards BTC, but I have already opened long-term contracts with GBTC, as market indicators show the presence of impulses for the growth of the crypto market.

Thus, traders can use the decrease in the premium on Bitcoin futures to enter the crypto market. It is possible that upon the expiration of the contracts in December, the crypto market will receive significant changes.