Cryptocurrency Market Faces Significant Volatility, but Quickly Recovers

During this week of the year, the cryptocurrency market has seen a rapid dip following the previously-attained records. Despite having the market cap surpass $1 trillion, over $150 billion were quickly wiped off due to an unexpected flash crash. Since then, however, cryptocurrency prices have managed to recover.

As expected, bitcoin was affected the most by the rapid downfall. The cryptocurrency crashed from $41,000 to $30,620 in a matter of hours, in what many feared to be a correction. Anytime a digital currency faces a dip, the price drop is worsened by panic selling, as traders worldwide rush to maintain their value by converting their cryptos to stablecoins. However, trading enthusiasts were quick to buy the dip, so the subsequent buy pressure has led to a quick recovery. Bitcoin has once again managed to surpass the $40,000 threshold, and is currently trading at $38,241. The price is settling around this value for now, but this doesn’t mean that the bull run is over.

The total cryptocurrency market cap is currently reported at $1 trillion.

At press time, ETH is trading at $1,223, XRP at $0.29, LTC at $149, EOS at $2.8, DOT at $14, and BCH at $505.


Weekly derivatives summary analysis

Here’s a quick preview of the main events that have occurred on the cryptocurrency derivatives market.

First off, the crypto derivatives aggregated volume has dropped from last week’s $161B to $83.84B today, a move that’s likely to have been caused by the considerable volatility in spot prices.

Here’s a brief look at trading volumes by derivatives category:

  • The perpetuals trading volume is reported at $67.40B, lower than last week’s $132B.

  • The futures trading volume is estimated at $15.44B, about half of last week’s $28.35B.

  • The options trading volume has fallen below the $1B threshold to $992.50M today.


A quick look into the current open interest rates

At this point in time, the total aggregated open interest volume is situated at $23.02, slightly lower than the $32.24B OI rate reported 7 days ago.

From a category standpoint, perpetuals report an open interest of $9.07B, followed by $4.77B for futures, and $9.17B for options.

Relevant derivatives news

  • Deribit announces a raise in the maximum threshold for BTC options strike price to $400,000
  • Market reports an all-time high for open interest on BTC derivatives this recent Sunday
  • Data shows that miners did not cause the recent BTC price drop




Risk Disclaimer

This article includes information about cryptocurrencies, derivatives and other financial instruments. Both cryptocurrencies and derivatives are complex instruments and trading digital assets involve significant risk and can result in the loss of your invested capital. All data and information is provided “as is” for personal informational purposes only, and is not intended for trading purposes or advice. Please consult your broker or financial representative to verify pricing before executing any trade.