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Bitcoin Futures in Backwardation, Here's What It Means for Traders

Fri, 11/25/2022 - 15:24
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Yuri Molchan
Recent report shows that situation with Bitcoin futures indicates large selling activity taking place
Bitcoin Futures in Backwardation, Here's What It Means for Traders
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IntoTheBlock analytics company has tweeted that Bitcoin futures contracts for December are going at a lower price than the BTC spot trading price.

Even though it indicates large selling activity by traders, there is still an arbitrage opportunity, the tweet says.

Bitcoin futures in backwardation

In a short tweet thread, IntoTheBlock's experts explain that the situation with Bitcoin futures mentioned above is called backwardation, and it shows that in the past two weeks, traders have been dumping BTC heavily for fear of lower price movement.

However, as per another tweet, this backwardation provides an arbitrage possibility of buying the futures contract and selling the spot. This way, IntoTheBlock says, traders could profit from the difference here.

U.Today reminds readers that trading cryptocurrencies can be extremely risky, and losing money on this is possible, especially for traders who lack experience in this market.

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Has Bitcoin reached the bottom?

IntoTheBlock stated that when futures contracts go into backwardation, this usually matches the times when markets hit bottom. The same thing happened with Bitcoin back in the spring of 2021 and 2020.

Highly negative rates could also be a sign of Bitcoin bottoming out, therefore, IntoTheBlock wonders if the flagship crypto has finally reached the bottom in this bear market.

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About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at

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