05 Jul 2022

Derivatives Update: CME trading below offshore exchanges again

After a period of CME futures trading above offshore exchanges, offshore exchanges are again leading. The premium on CME declined sharply just before the weekend, hitting negative territory on June 30th.
After hitting all-time lows last week, the futures premiums have seen a change in directions over the weekend.After trading at a discount to CME, offshore exchanges are now back above CME, with FTX trading at a 2.6% basis. Binance has followed closely, but CME is down to a 1.5% basis after the decline last week.
Futures basis week 26
The CME basis even hit negative territory on June 30th, after bitcoin dropped below $20k and briefly touched the $18k area, before closing the month with a sharp push towards $20k again. The Coinbase nano futures that launched last week still see low demand. The open interest has been relatively flat, but the volume has increased a bit, seeing a daily trading volume of $8.6 million on Friday.
Funding rates approaching neutral levels while price stays flat
Funding rates on Binance and Bybit are now moving towards neutral territory after a push upwards this weekend. Funding rates for Binance and Bybit’s perps have climbed lately, seeing an average of 0.003%. The funding rate for Bybit’s BTC perp has actually been neutral over the weekend, at 0.01%, while Binance’s has been marginally on the negative side. The trend of a climbing funding rate shows that more long traders have been active this weekend, while the price has been fairly flat. It will be interesting to see if this trend continues and if we’ll see a push up in the positive funding rate territory, which we haven’t seen in several months.
funding rates week 26
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