How do futures provided by centralized exchanges influence the price of the underlying assets?
Asked 2 years ago
Hello. Just as the question reads, how do futures influence the price of underlying assets, like bitcoin?
Wednesday, February 16, 2022
Bitcoin futures does not have a direct correlation to the price of Bitcoin. However, futures may hold some temporary influence over price swings and may indicate where the market is heading. Increased availability of crypto futures means more big market players can access cryptos, driving massive liquidity into the market. This act could trigger a short-term bullish trend. Some traders monitor market sentiment by looking at the futures' trends. For instance, a trend of Bitcoin shortening could indicate bearish sentiment growing within the Bitcoin market.
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