Hifi Finance (HIFI) recently experienced a surprising seven-day rally, which finally broke the consolidation period that token holders had been waiting for for a long time. Although the price of Bitcoin (BTC) has remained relatively stable, HIFI has experienced a significant drop in prices, arousing market interest in new investment opportunities in alternative cryptocurrencies
.
During this period, the price of HIFI has shown significant volatility. Over the past week, HIFI has experienced an incredible 362 percent growth compared to the Tether (USDT) stablecoin on the Binance Exchange.
The trading peak was reached on September 16 at 2,320 dollars, exceeding the psychologically significant level of $2,5000 and reaching an intraday high of $2,6635
.
This sudden increase in HIFI prices was mainly attributed to the significant increase in trading volume on the Korean Upbit exchange. Over the course of the day, Upbit Korea represented as much as 65% of the total trading volume, recording a significant increase of 208% in the volume of transactions. In particular, Upbit accumulated 717 million dollars in trading volume in the previous 24 hours. However, the price has also experienced a significant 40% drop over the past day, due to Binance’s introduction of the HIFI perpetual contract
.
There was a significant discrepancy between the prices of HIFI on the futures market and those on the spot market. HIFI futures were traded at a 40% discount compared to spot prices, a rare and worrying phenomenon that raises questions about the price dynamics of
Hifi Finance.
Perpetual contracts, similar to futures contracts, are derivative instruments that lack an expiration date. They allow traders to speculate on the value of an asset using leverage, without worrying about the expiration date of their contracts. While they offer amplified profit potential, they also carry the risk of liquidating traders’ positions quickly in the event of a significant drop in
the asset price.
The drop in the price of HIFI on Binance after the introduction of the perpetual contract can be attributed to several factors. Perpetual contracts offer greater liquidity, tighter spreads, and resistance to market manipulation, making them an attractive choice. It’s interesting to note that Korean traders have been associated with ‘pump-and-dump’ practices in the past. Ki Young Ju, CEO of CryptoQuant, emphasized that this behavior could be affected by strict capital controls in the region, which limit arbitrage opportunities between global exchanges
.
