RATE Group | Bitfinex Premium Goes Negative; Last Time it Did, Bitcoin Fell 30% in 3 Months
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Bitfinex Premium Goes Negative; Last Time it Did, Bitcoin Fell 30% in 3 Months

12 Jan Bitfinex Premium Goes Negative; Last Time it Did, Bitcoin Fell 30% in 3 Months

Posted at 15:10h in Bitcoin News by

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The premium of bitcoin on Bitfinex has dissolved in recent months. It is trading at a similar price range as spot exchanges and the last time it did, which was in August 2019, a brutal correction followed.

There are many factors at play when bitcoin often enters a short-term bear market. Hence, it is premature to claim that the drop of premium rates on Bitfinex can solely contribute to a big pullback.

But, it is an indicator investors can observe in the coming weeks as it may show a glimpse of the trend of BTC throughout the first quarter of 2020.

Premature to say bitcoin is likely to see steep correction

Often times, Tether (USDT), a stablecoin whose value is pegged to that of the U.S. dollar, trades at slightly below $1. As such, it causes the price of bitcoin to be higher on Tether-based exchanges in comparison to spot exchanges with fiat trading pairs.

The lack of premium on Bitfinex, despite its long history of having a high premium over other exchanges, may indicate that there is…

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