Analysis: Under the condition of spot premium, Bitcoin may stabilize its price in the next few weeks

Although Bitcoin has rebounded in the past two weeks, the previous plunge in prices has indeed had a significant impact on the Bitcoin futures market. In early 2020, bitcoin futures were trading at a price higher than the spot price, leading to a rise in derivatives premiums. In fact, shortly after Bitcoin soared to $ 10,145, the market began to look bullish. However, according to the latest report from Arcane Research, the current trading price of Bitcoin futures on various exchanges is still lower than the spot price, and the market sentiment has changed. According to the data, the premium of the BTC-26JUN20 contract was -2.2%. In addition, the Bitcoin contract in September also saw a premium of -0.6%. Market returns in this case are considered to be at a spot premium. Backwardation means that the market expects the price of longer-term contracts to rise, while the price of more recent contracts will fall. However, the spot premium is also due to high demand for an expiring contract. In this regard, the market seems to be good for investors, who are able to enter long positions and get a premium from them. In the spot premium state, it can also be speculated that most markets believe that spot prices will continue to fall. With a spot premium, Bitcoin is expected to stabilize its price in the coming weeks.