Bitcoin Perpetual Futures hits $ 48,000 on Binance

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Binance-based perpetual bitcoin futures contracts denominated in dollar-backed tether stablecoin (USDT) rose on Monday morning, widening the spread on the spot market price to over $ 8,000.

The BTC / USDT perpetual contract hit a high of $ 48,168 around 01:00 UTC, according to Binance data. Around the same time, bitcoin jumped nearly $ 3,000 in the spot market, hitting a one-and-a-half-month high of $ 39,544, according to data from CoinDesk 20. The cryptocurrency seemed ready. for a rally, having flipped the 50 day moving average (MA) resistance widely followed at $ 35,000 overnight.

The exaggerated bullish movement of the perpetual contract is likely the result of a large trade.

Related: Binance Starts Lowering Leverage Limit To 20x Following Similar FTX Move

“A user has placed a large number of [buy] BTCUSDT perpetual futures orders during the market rally, resulting in a wick of 48,168 USDT, ”Binance spokesperson told CoinDesk in a Telegram conversation. “We looked and found no system issues. No other user has been affected as we are using the brand’s price for clearance, ”the spokesperson said.

Binance is the world’s largest bitcoin futures exchange, contributing $ 3.5 billion, or nearly 10% of the global open interest of $ 13.9 billion, according to data provided by Skew. Open interest refers to the number of futures contracts traded but not with an offset position.

In addition to large buy orders, short-term liquidations or forced closing of short positions due to lack of margin may have increased upward pressure on prices.

According to data source Coinalyse, major exchanges, including Binance, liquidated futures positions worth more than $ 650 million today. Of this amount, short liquidations represent nearly 85%, or $ 550 million. The data shows that the positioning in the futures market was biased downward. The number of open futures has risen steadily since late May to a two-month high last week as traders took short positions.

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Related: Bitcoin Returns Above $ 39,000 In Biggest Single Daily Gain In 6 Weeks

The crypto derivatives market has seen explosive growth since the March 2020 crash. One effect of this is price volatility caused by long-short sell-offs. “We would like to take this opportunity to remind the community that the crypto market can be volatile and all trading involves risk. We advise all users to trade responsibly and trade only within their means, ”Binance spokesperson said.

The situation may improve in the future as Binance and FTX, two of the largest exchanges, have placed limits on leverage. Binance CEO Changpeng Zhao announced earlier today that he has imposed a 20x leverage limit for new users from July 19, down from the initial leverage of 100x. Zhao said the new limit will be phased in to existing users over the coming weeks.

At the time of going to press, bitcoin was changing hands for nearly $ 38,200, which is a 10% gain on the day. Meanwhile, the Binance-based BTC / USDT perpetual contract was trading at a slight discount of $ 38,100.

Also Read: Bitcoin Surpasses $ 39,000 In Biggest Daily Gain In 6 Weeks

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