Bitcoin B/O spread on BitMEX Spikes

By Rajat Gaur

Bitcoin has witnessed a challenge with the price on the king coin falling down to over $8,736. Derivatives are considered to be a major reason behind determining market behavior, whereas, the derivatives market is expected to witness another bearish pull as the Bitcoin halving enters into the platform. This would reflect as the traders are hedging their bets. 

Looping onto the Skew chart, the B/O spread for trading net worth of $10 million XBTUSD contracts on BitMEX’s platform spiked from 0.20% on 23rd February to 0.29% on 29 February. The spread reached 0.30% on 28 February. The recent trend in the B/O spread had a declination in terms of liquidity on the platform.

In the previous three months, Bitcoin has accounted for fast fluctuations in prices. In terms of its prices, Bitcoin witnessed losses of 13.91% after a drop from trading at a valuation of $10,145 on 20 February to $8,736 on 29 February. 

The offer spread and Bid is believed to be one of the major indicator for determining the liquidity of the platform, higher the spread, meaning, lower the liquidity. The B/O spread of contracts worth $10 million on BitMEX with an average of 0.53% on 18th December when the price of the king coin dropped from $7,156 on 16 December to a low of $6,622. 

With the report of CoinGecko, XBT/USD registered around 79.17% of BitMex’s total trading volume, a metric that dropped down to $4.431 billion. BitMex’s Open Interest [OI], a measure of market activity, has also witnessed a significant drop. The OI on BitMEX has recorded CoinGecko’s chart which was reached at $1.768 billion on 26 February, whereas, after the declination over the latter part of the week, the figures stood at $1.540.

Moreover, Deribit witnessed impressive growth in the Offer spread and the Bid of Bitcoin for net worth $10 million quota size. The B/O spread on the platform showed declination in the previous three months, indicating a steady increase in its liquidity. Thus, it accounted for a hike of over 1.9% on 27 February within two days.

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