Bitcoin price recently spiked from around $4150 to more than $5,300 in a fabulous two-day move, marking massive gains upwards of over 20%. The cryptocurrency took the entire market with it, as the majority of the altcoins also recorded notable increases.
However, besides that, it seems that other irregularities have also taken place, perhaps signaling that the sentiment indeed is turning bullish.
BitMEX Price Surpassed That On Bitfinex
BitMEX is the most famous crypto margin exchange, and probably has the largest effect on Bitcoin’s price fluctuations. For the first time in months, the price of Bitmex’ Bitcoin (XBT) perpetual contract was higher than that the spot price of Bitcoin (BTC) on Bitfinex.
Historically, there has always been a difference between the two exchanges. One of the reasons, as touted by many, is because Bitfinex hasn’t managed to complete all of the fiat withdrawals and had to suspend fiat deposits. As people become more eager to get their funds out of the exchange, they are likely to be willing to pay a premium in order to do so. Hence, they prefer to buy Bitcoin in order to withdrawal.
However, as seen on the chart, Bitcoin’s spot price on Bitfinex was yesterday lower than that of BitMEX’ XBT perpetual contract, begging the question – why?
Well, first of all, it’s important to note that the perpetual swap contract on BitMEX derives its price from the so-called BXBT index, which is sourcing its price from Coinbase, Kraken, and Bitstamp. And another thing to note is that it’s a contract with no expiry date, it’s not spot trading of Bitcoin and users don’t acquire the underlying asset.
Hence, if more long positions are suddenly opened, that would, in theory, drive the contractual price up. Citing the official guide of BitMEX shows us that:
Traders who want to profit from an increase in the Bitcoin / USD price will buy the XBTUSD contract. Conversely, if they believe the price will go down, they will sell the contract.
So, It’s possible that the reason for which the price reacted this way was that more traders were speculating yesterday that the price of Bitcoin will be increasing, hence opening long positions rather than shorting it. Naturally, that’s a bullish sign, and for the first time in months, we saw BitMEX over BitFinex price.
The Ultimate Bullish Sign for BTC?
During the peak of the 2017 Bitcoin bubble (November and December 2017), BitMEX was always ahead of BitFinex.
Of course, it’s important to note that it’s far too early and definitive predictions of this sort would be somewhat preemptive. Bitcoin has had an incredible run through the past two days, but it is critical to monitor the price action and the overall sentiment in the next few days in order to better determine whether there is an actual trend reversal.
*Cryptocurrency charts by TradingView.
The post Looking Bullish? BitMEX Bitcoin Price Surpassed Bitfinex For The First Time in 2019: Here Is Why appeared first on CryptoPotato.
Source: Crypto Potato