Is Bitcoin’s Recovery in Danger? CryptoQuant Flags Binance Imbalance

CryptoQuant warned that the recovery could quickly become unstable unless weak spot demand strengthens, noting that about 90 percent of Bitcoin trading volume on Binance comes from futures.

According to the data platform’s assessment, the ratio of spot trading volume to futures trading volume on Binance is around 0.12. The spot market, where Bitcoin is bought and sold directly, is clearly lagging behind futures.

Positions are declining, but spot demand isn’t strengthening

Open interest, which represents the total value of outstanding futures contracts on Binance, fell from $10.6 billion to $9.2 billion in one week. Despite this, the ratio of spot volume to futures volume showed no improvement.

According to CryptoQuant, speculative trading can drive the initial move during rallies. But spot buying also needs to come in afterward. The platform says this demand is the missing piece in the current recovery and warns that a move sustained by the dominance of futures could become fragile.

How does this differ from the previous Bitcoin analysis?

Our earlier analysis of the divergence between Bitcoin’s price rise and futures positions viewed the decline in marketwide open interest denominated in BTC as prices rose since June as a pattern pointing to the impact of spot buying.

The new assessment, by contrast, compares current spot and futures trading volumes on Binance. One measures the value of outstanding contracts, while the other measures the distribution of completed trading volume. CryptoQuant’s warning is based on the continued weakness of the spot side in this second measure.