How Bitcoin became the favorite of futures traders on this derivative exchange
- BTC futures monthly volume on CME Group closed at a one-year high in July.
- Positive funding rates revealed that most futures contracts opened in the past few months have been in favor of BTC’s price.
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BTC futures trading allows traders and investors alike to speculate on the future price movements of the leading coin by placing bets on whether it would go up or down over a specific period in the future.
With over 120,000 active users spread across 60 countries, CME Group is one of the world’s largest derivatives marketplaces. It boasts of high patronage from many institutional investors, including BlackRock, which recently made its Bitcoin futures ETF filing. This makes trading activity on the exchange one to take note of.
The trading volume of BTC futures on the exchange within the last 30 days totaled $53.3 billion at press time. Comparatively, a year ago, this figure stood at $1.47 billion. This represented a remarkable surge of more than 3500% in CME Group’s BTC futures monthly trading volume over the past 12 months.
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The leading coin’s future markets revealed that most bets placed last month were made in favor of a price rally. This has occurred despite the coin’s persistence within the $29,000 and $32,000 price ranges and raging negative market sentiments.
According to data from Coinglass, BTC funding rates across exchanges remained significantly positive in the past few months.
In futures contracts, funding rates refer to the recurring fees that are exchanged between long (buy) and short (sell) position holders. These fees help ensure that the futures contract’s price closely tracks the underlying asset’s spot price (actual market price).
When this is positive, it means that more long positions are being opened and often reflects the market’s general sentiments. A negative funding rate, on the other hand, suggests declining interests with more short trading positions being entered into.
With the past few months marked by a growing count of long BTC trading positions, and BTC’s momentary trading above $30,000, short traders have been plunged into losses.
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At press time, BTC exchanged hands at $29,320.87, according to data from CoinMarketCap. As the king coin’s price continues to face resistance at the $30,000 price level, new address momentum has declined.
At press time, BTC’s new address count was 491,514. Per data from Glassnode, on a 30-day moving average, it began its descent in April and has since dropped by 7%.