Bitfinex Derivatives launches a futures product that will allow traders to speculate on the price fluctuations of Bitcoin and Ether. In other words, the new product serves as an index for market sentiment.
Let’s see below all the details.
Bitfinex: new opportunities for Bitcoin and Ether with perpetual futures
As anticipated, Bitfinex Derivatives, the leading derivatives platform provided by iFinex Financial Technologies Limited, has today announced the launch of two new perpetual futures contracts.
Contracts are designed to monitor forecasts of fluctuations in price of Bitcoin and Ether. These new perpetual future contracts are based on the implied volatility of option contracts related to Bitcoin and Ether.
Implied volatility is a measure of the constant and prospective volatility expected in the options market.
The new futures contracts, Bitcoin Implied Volatility Index and Ethereum Implied Volatility Index, will follow the underlying activity in the Bitcoin and Ethereum option contracts. They will do so using the Volmex Implied Volatility indices, which monitor the expected 30-day volatility.
Both contracts will be available for trading with leverage up to 20 times. We remind you that Volmex is a well-known developer of volatility indices and products crypto.
The BVIV and EVIV contracts, by measuring the market’s expectations on the future price volatility, essentially track the market’s “fear” of expected price movements of Bitcoin and Ether when the market is ‘concerned’.
More generally, they track the cost-effectiveness of the respective option contracts. Volatility indices tend to correlate negatively and generally increase when the market falls.
Furthermore, they usually move significantly when “black swan” events occur.
Bitfinex: Bitcoin could maintain $20,000 as a key level in the current cycle
With a long-term holder realized price below $20k, Bitfinex analysts believe it is unlikely that Bitcoin will be traded near this level in the current cycle.
This is because a group of long-term holders heavily bought the cryptocurrency since the beginning of February 2023, when BTC was trading above 24,000 dollars.
Currently trading at around $70,600, Bitcoin has a short-term holder realized price of $55,834, indicating its crucial role as a “dynamic support/resistance level during this cycle,” analysts emphasize.
Bitfinex does not foresee a V-shaped recovery as happened with previous drops from 2023. Suggesting therefore that any drop to $56,000 would align with the maximum retracement from a new local high to the bottom, for a total of about 23-24%.
The latest data from Bitcoin exchange-traded fund (ETF) spot showed net negative flows for the first time last week, with each trading day reporting a net negative flow, according to Bitfinex.
However, despite this development, analysts suggest that this does not raise significant concerns.
They attribute the outflows to investors transferring funds from GBTC to other ETF providers that offer lower management fees and more attractive options.