The volatility in the crypto market has been growing and Bitcoin has broken out of its consolidation phase. This uptick in volatility may indicate a larger game at play for the future of Bitcoin.
This expectation has been in the market for a long time, even when BTC consolidated and more and more users were accumulating the digital asset. The current value has still remained under $11k, which has been the new support range visible in the BTC market. This level has been seen as a great entry point for traders, as the premium for December futures has also noted a decline.
Source: Arcane Research
As the September expiry culminated, the focus was now shifted to the December contracts. The above chart highlighted the rise and fall in premium since August, while currently, it was noting a downwards slope. The Chicago Mercantile Exchange [CME] was still witnessing a higher premium of 6.28% compared to other retail-focused platforms. This indicated how bullish big investors have become on bitcoin relative to other traders. The faltering price of BTC has posed a perfect opportunity for these investors to enter the market, including the low premium of GBTC.
$gbtc at historically low premium to bitcoin $btc price. I’m not overly bullish #Bitcoin but added size to my gbtc long position today based off outperformance we should see in near term. pic.twitter.com/Nseejn8VCn
— Open Water Trader (@uptickcrypto) September 29, 2020
According to Financial analyst, Ian Dyer, the premium remained usually the lowest while Bitcoin consolidates and a rally is predicted. On 30 September, the premium for GBTC was the lowest at 6% which was considered to be a bullish sign in the market.
Source: skew
With GBTC and Bitcoin futures both recording a great entry point for traders, the December expiry will likely witness gradual changes. Currently, The annualized premium dropped to 6.44% as prices slid.
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