Bitcoin options volume surged during Bitcoin’s price fall. Crypto trading desks and exchanges saw their volumes increase on Thursday. Things were no different in the area of derivatives. The FTX said it had suffered from an overload of its database.
13 March, 2020 | AtoZ Markets – As Coronavirus infection spreads worldwide, the global economy is under serious threat. Although Bitcoin has already proven itself as a safe haven, investors are now worried about investing more in this safe haven. The most popular cryptocurrency continues to shake investor sentiment. The value of bitcoins has dropped dramatically from $ 10,000 to $ 4,200. Bitcoin dominates the market at 65%, with a market capitalization of $ 103 billion.
Bitcoin Options Volume Increases
People saw a sharp drop in the price of digital assets, including bitcoins, which fell below $ 6,000 on Thursday. After a long volatility phase above $7700 zone, BTC impulsively crossed a significant level. At press time, the price of bitcoin is around $5,570, a decrease of more than 25%.
Crypto trading desks and exchanges saw their volumes increase on Thursday. According to Skew, on Thursday, bitcoin options volume surged significantly, the vast majority of this increase has occurred on Deribit. Marius Jansen, COO of the Deribit Crypto Derivatives Exchange said:
“All of the BTC’s safe haven scenarios turned out to be inaccurate. We have clearly seen the impact of risk-off on BTC and the rest of the market, as all assets have been massively sold.”
Deribit saw around 35,000 bitcoin options contracts being traded during the 24 hours. In total, more than $ 1.6 billion traded on the exchange over the same period.
“BTC perpetual is trading at a discount compared to the spot, and the basis has also declined. March futures are late in most markets. This downward trend is amplified by large liquidations in all product markets derivatives, including Deribit, “said Jansen.
Many Major Exchanges Suffered from Database Overload
The market also put significant pressure on the exchange infrastructure, according to market participants. Almost all major exchanges, including FTX, Huobi, BitMEX, Deribit all have technical problems such as delays in order books.
“During this time, one of the FTX databases overloaded. This resulted in a significant delay in the order book. We had to limit/reduce orders to keep it running,” said the FTX CEO Sam Bankman-Fried in a tweet.
BitMEX’s bitcoin volatility index, which measures the price of bitcoins, has increased from around 5 to over 32. The total hourly liquidation volume of BitMEX’s famous perpetual bitcoin swaps at once hit $ 501 million, averaging $ 16 million over three days.
After Bitcoin hit a record low, the BTC was quick to climb higher. Moreover, the price is currently near the $ 5,700 zone and is trying to stay above $ 5,000. If the BTC price stay above the $ 5,000 area with a weekly close, the price may recover higher towards $ 7,500 in the coming days.
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