• Bitcoin surged 15% from June 20’s opening price of $26,750 to a peak of $30,820 the following day.
• CME open interest grew by over 5k and Kraken saw a second-largest outflow with $225M Bitcoin withdrawn.
• Miners are moving Bitcoin to exchanges en masse and return of Bitcoin leverage signals impending market volatility.
Bitcoin Market Volatility
The past few days have seen an escalation in the volatility of the Bitcoin market. On June 20, the cryptocurrency opened at $26,750 before climbing by 15 percent to its peak at $30,820 on June 21. This surge was driven largely by an increase in leveraged trading and spot buying activity on Coinbase – which reached late April highs – as well as the movement of miners transferring large amounts of BTC to exchanges.
CME Open Interest
The Chicago Mercantile Exchange (CME) reported that its open interest for Bitcoin futures had grown by over 5k since mid-May while Kraken saw a second-largest outflow with $225 million worth of BTC withdrawn from their platform during this period. These movements indicate that traders are taking advantage of rising prices and increasing their exposure to crypto markets through derivatives such as futures contracts.
Miners Moving to Exchanges
Miners have also been moving large amounts of Bitcoin from mining pools to exchanges en masse in anticipation of further price increases due to increased demand for crypto assets. This is causing further market volatility as investors speculate about potential gains or losses depending on the direction BTC takes in the near future.
Return of Leverage Signals Impending Market Volatility
The return of leveraged trading activity has signaled further impending market volatility as traders take long or short positions based on their predictions for future prices or simply look to capitalize on short-term opportunities presented by rapid swings in valuation between major digital currencies like BTC and ETH.
Grim Report from Bank of England
To add insult to injury, UK core inflation figures recently released showed an unexpected surge which has been met with dismay by the Bank Of England who view this news negatively after years spent trying unsuccessfully to raise it up through traditional monetary policies such as quantitative easing programmes and interest rate cuts.
