The market crash had been hard, to say the least. All cryptocurrencies have stockpiled immense losses in the past couple of days.
The perpetual futures market has been trading in par with the spot market. However, amidst high volatility – like what was witnessed today – the difference between perpetual futures and spot trading can skyrocket. Due to high liquidation orders, exchanges are sometimes unable to meet the liquidity requirements or create most positions which leads to a high gap between the price level at which perpetuals are traded and the sport traded price.
Ethereum, Litecoin, and Sushi went as low as 43% in the futures market from their spot traded price. Ethereum futures were operating at 26% below while Sushi perpetual futures traded for 43% below the spot traded price. Although the wide gap was harmless. Automatic stop orders were not triggered even as the perpetual futures were trading way below the spot price. The gaps were also not long-lasting and the market quickly corrected.
However, recent price action shows that the bearish trend of the market may have been reversed. Bitcoin breaks above the price level of $40,000 which was acting as a strong resistance level for the cryptocurrency. The previous support of $46,000 will now be acting as strong resistance for the coin.
After falling to a five-month low of $30,000, the cryptocurrency has finally picked up bullish momentum with the price standing at $41,911 at the time of writing. Following the king of the market, other cryptocurrencies have also started off an upside move. In the 24-hour timeframe, BTC went up by 16% while ETH increased by 19%.