Why Does a High Contract Rate Lead to a Fall in Price (Contract Fees)

08/15/2023 19:26 • Digital Disruptors • 59 views

Why does a high contract rate lead to a fall in price? Why does a high contract rate lead to a fall in price?

Contract fees are a pricing mechanism that exists in the market. When the price rises to certain conditions (such as the highest price of a certain trading pair), it can cause a sharp drop in market prices.

After the bull market of Bitcoin, various factors led to a decline in contract prices, making people believe that Bitcoin was rising too fast. However, as Bitcoin continued to decline, more and more people believed that this situation would not occur.

In the past few months, the cryptocurrency market has been highly volatile. According to Coindesk data, as of the end of June, the spot premium of BTC/USDT was -0.3%. This is a significant decrease compared to the US stock market. (Image source: TradingView)

Although Bitcoin futures market is rapidly maturing, investors’ attitudes towards investment risks have changed-they are worried about the possibility of significant adjustments in the future. Therefore, if the price suddenly changes and the market is in a panic, it is likely to trigger selling pressure.

According to Bitcoinist news, since early 2018, Deribit, the world’s largest digital asset derivatives exchange, has been actively researching the prospects for its products and services and considers them a viable alternative. The platform also provides products and services denominated in US dollars, but does not specify specific trading volumes or other indicators. Although Deribit has developed various financial tools to assist customers in managing encrypted assets, it still faces challenges in practical application, such as custody. These issues include regulatory barriers, liquidity and poor liquidity, and lack of sufficient liquidity. Therefore, these solutions will be used to reduce costs, improve user experience, and enhance security.

However, some uncertainties in the current market also indicate that as the cryptocurrency market develops, more and more funds are flowing from traditional financial markets to Bitcoin. For example, JPMorgan recently stated that “with institutional capital entering Bitcoin, more funds are flowing into positions in this field.”

At the same time, some analysts predict that if Bitcoin’s price continues to fall, it may trigger new negative news.

In addition, some analysts warn: “If the price of Bitcoin does not rise above $50,000, the upward trend cannot be sustained.”

The original article is from newsbtc, compiled and translated by Blockchain Knight. The English version belongs to the original author, and the Chinese version is reproduced, please contact the editor.

Contract Fees

According to reports, according to OKEx data, the contract fee is 0.035 ETH (worth $1). Among them, the ETH transaction fee is 0.023 ETH, and the WBTC handling fee is 0.042 ETH. This fee needs to be paid for contract opening and withdrawal; the use of contract funds is priced according to the user’s asset type.

In addition, OKex quotes show that as of now, the 24-hour BTC/USDT perpetual contract market price on mainstream exchanges is $9wap (including Binance Smart Chain), and the total trading volume in the past 24 hours is $6,400,750, a 13.75% increase compared to yesterday.

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Why Does a High Contract Rate Lead to a Fall in Price (Contract Fees)

Contract Fees

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