Like the stock market, there are such exchanges in the crypto market that payout derivatives to people who have bought tons of cryptocurrencies or leverage to get their hands on the derivatives. But something strange is in the works as the price of Bitcoin on the derivative exchanges is suddenly increasing, which hints at the incoming volatility.
These derivative exchanges historically can create an incredible price movement thanks to the leverage and its provision to their clients as these exchanges provide margin trading of even over the 100X leverage as well.
A Large Volume of Bitcoin Reaching the Derivative Exchanges Hinting at Intense Volatility
Over the last 24 hours, Bitcoin has already seen tons of volatility as it has lost about 6% of its value in that time, and the adoption rate also seems to be staggering, which is not a good sign at all. It is now around $34k, which is not even hitting closer to the stress points, and that is another hint at the incoming volatility and how it is going to hit harder than ever. The manipulation of the market through media and influence is still an issue with the crypto market. That definitely puts a bullet into people’s trust in cryptocurrencies such as Bitcoin.
19th of May was the most threatening day regarding the price performance of Bitcoin and a strong volatility movement where it briefly scrounged below $30k and had the traders and investors worried immensely. Spot exchanges as well saw a massive flow of Bitcoin on the 19th, and you should know that without the derivative exchanges sticking around, Bitcoin can only be sold but can’t be used to create leverage of any kind.
This significant turning in of Bitcoin definitely pumped the price down, and once again, it was a point for the team volatility. The Bitcoin volume is coming in hot not only into the derivative exchanges but also in other non-derivative exchanges, which hints at the massive proportion of loss in terms of market dominance and Bitcoin price, thus paving the path for volatility; the most tenacious trait of the crypto market. Just like in the past, when Bitcoin took a hit, it rebounded strongly, this case shouldn’t be any different, but nothing can be said for sure.