Amid the turbulence of the digital currency market, CME Bitcoin futures trading volume has plummeted by an astonishing 89% in just three days. What reasons and logic are hidden behind this number? Despite the sharp drop in trading volume, the market remains bullish. Let's explore in depth and uncover the secrets behind this phenomenon.

Amid the ever-changing digital currency market, the plunge in CME Bitcoin futures trading volume has attracted widespread attention. Behind this phenomenon is the consensus of market participants on the long-term development trend of Bitcoin and their optimistic expectations for future market trends. Although trading volume has declined significantly in the short term, the market's continued bullish attitude is self-evident.

First, we need to understand the reasons for the plunge in CME Bitcoin futures trading volume. According to market analysts, this phenomenon may be affected by many factors, including market sentiment fluctuations, declining investor confidence, and even technical factors. However, this plunge does not change the fundamentals of Bitcoin's long-term value. Investors generally believe that Bitcoin, as a digital gold, has scarcity and anti-inflation properties, and long-term holding is still a wise choice.

Secondly, the market's bullish logic also lies in confidence in the future development of digital currencies. With the continuous maturity of blockchain technology and the continuous expansion of application scenarios, the potential of the digital currency market is becoming increasingly huge. Investors believe that Bitcoin, as the leader in the market, will continue to play an important role in the future, and its value will inevitably rise.

In addition, from a global perspective, the attitudes of governments and regulators towards digital currencies are gradually becoming clearer. More and more countries have begun to recognize the legal status of digital currencies, which has promoted the development and growth of the entire market. This policy benefit has further strengthened the market's optimistic view on the future of digital currencies.

Behind the bullish market, investors are also constantly looking for better investment strategies and tools. Bitcoin futures trading, as a derivative tool, provides investors with more investment options and opportunities to hedge risks. Although the trading volume has plummeted, it does not mean that investors have lost confidence in Bitcoin. On the contrary, they pay more attention to the returns and risk control of long-term investments.

In general, although the plunge in CME Bitcoin futures trading volume has attracted market attention, it cannot change the market's optimistic attitude towards the long-term development of digital currencies. Investors still firmly believe that Bitcoin, as a digital asset, will continue to play an important role in the future, and its potential value will gradually emerge. Therefore, even if the market is volatile, we should maintain rational investment, grasp the general trend of long-term development, and meet the challenges and opportunities of the digital currency market.

According to data from the analysis agency Skew, the average daily trading volume of CME Bitcoin futures fell below the lowest level this year on the last trading day of last week. However, foreign media pointed out that this may still be a bullish signal for the market.

Source: Skew

In just one week, the average daily trading volume of CME Bitcoin futures has experienced a sharp decline, from a record high of $1.1 billion on February 18 to a sharp drop of 55% the next day; until February 20, it fell 58% to $211 million; and finally only $112 million last Friday, the lowest level since December 31 last year, when it was $118 million. Overall, CME Bitcoin futures trading volume fell 89% in just three days.

Despite this, the open interest position of CME Bitcoin futures remained near the 7-month high of $338 million set on February 14. The so-called "open interest" refers to the number of unfulfilled futures contracts, while "trading volume" refers to the number of contracts traded in a specified period. If the market sees both "declining trading volume" and "open positions" at the same time, it is usually regarded as a signal of "investor confidence surge".

Foreign media "CoinDesk" analyzed that in this case, the market usually continues the previous trend. It is worth noting that the price of Bitcoin rose by more than 50% from a low of less than $7,000 in the first six weeks of 2020, once breaking through the $10,000 mark.

During the same period, the average daily trading volume of CME Bitcoin futures increased from $176 million to $1.1 billion, and the open position increased from $127 million to $338 million. It can be seen that the rise in the Bitcoin spot market is also supported by the open positions and trading volume in the cryptocurrency derivatives market.

According to Bitpush data, Bitcoin, the cryptocurrency with the highest market value, is currently fluctuating below $10,000, but market sentiment remains optimistic.

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