The king of cryptocurrencies had been struggling to break the strong resistance level at $60,000; however, the cryptocurrency market can be expected to turn strongly bullish as Bitcoin crossed the resistance level and is trading above $60,000. At the time of publication, the cryptocurrency stands at $60,102.
While the king of cryptocurrencies was struggling, the Bitcoin futures market was soaring. Despite the bearish struggle of Bitcoin, the futures have been skyrocketing. The three-month BTC contracts that are set to expire in June have been trading at a price level above $65,000. Although future contracts generally tend to operate at a premium – but not at the sky-high levels at BTC contracts.
The BTC three-month contracts reached a record level of 50% annualized premium. The futures contracts are fixed and do not have a funding rate and usually benefits from a predictable premium. The futures usually trade with 10% to 20% annualized premium but 50% is unheard of – especially when Bitcoin is at a crucial resistance level.
As the cryptocurrency market crossed $2 trillion in market capitalization, the cryptocurrency derivatives market has also been on a roll. The derivatives market is largely unregulated and with market efficiencies on the rise, it is only a matter of time when regulation will become crucial for the market.