Bitcoin Derivatives Set to Propel $100,000 Surge, Analysis Reveals

Recent data indicates that the trading volume for Bitcoin derivatives has surpassed that of spot trading during BTC’s recent recovery that saw prices exceed $100,000.

Recent Decline in Bitcoin Trading Volume Ratio Below 1.0

In a recent update on X, CryptoQuant analyst Axel Adler Jr discussed the fluctuations in Bitcoin’s Trading Volume Ratio. This metric measures the comparison between trading volume on spot exchanges and that of derivatives markets.

A Trading Volume Ratio above 1 signifies that spot exchanges are experiencing greater trading volume than derivatives, while a ratio below this mark indicates that derivatives trading is more prevalent among investors.

The analyst provided a chart illustrating the Bitcoin Trading Volume Ratio trends over the past few years:

The chart reveals that the Bitcoin Trading Volume Ratio has recently fallen below 1, indicating that trading on derivatives platforms has been more significant than that on spot exchanges.

This trend continued as Bitcoin experienced its latest recovery rally, pushing prices back above $100,000. The chart highlights a contrasting trend during the previous month’s rally.

During that rally, the Trading Volume Ratio climbed above 1, suggesting that spot trading may have been the primary driver of the price increases.

Historically, price rallies that are sustainable tend to occur when driven by stronger activity in spot markets, while those fueled by derivatives trading often face instability.

Considering that the current rally has been largely influenced by derivatives trading, its sustainability may be questionable. The future developments for Bitcoin remain to be observed.

In other developments, on-chain analytics firm CryptoQuant has pointed out that Ethereum appears significantly undervalued compared to Bitcoin in another X post.

The analysis shared features the comparison of the Market Value to Realized Value (MVRV) Ratios for Ethereum and Bitcoin. The MVRV Ratio is a well-known on-chain metric that assesses the overall profit-loss scenario for investors.

The chart indicates that Ethereum’s MVRV Ratio is considerably lower than that of Bitcoin. CryptoQuant remarked, “Historically, this has led to Ethereum outperforming. However, current supply pressure, weak demand, and stagnant activity may hinder any rebound.”

Current Bitcoin Price

After experiencing a nearly 3% increase in the last 24 hours, Bitcoin has successfully surpassed the $101,000 threshold.