Bitcoin Stays Steady as Spot Market Surges Past Derivatives in Investor Inflows

The recent surge in bitcoin (BTC) has been marked by a combination of impulsive price movements and distinct periods of consolidation. Notably, the active involvement of spot traders has played a crucial role during this upward trend.

The most recent report indicates that there has been a wave of aggressive spot market buying. In contrast, participants in the derivatives market found themselves in a relatively disadvantaged position.

Spot Market Outshines Derivatives

Since the middle of April, the market has experienced marked net buying in the spot sector across various trading venues. This is illustrated by the Spot Cumulative Volume Delta (CVD), which assesses the net balance of aggressive purchases versus sales.

Analysts noted that the CVD on major centralized exchanges reached over $45 million daily. This increase coincided with bitcoin’s ascent from $75,000 to over $104,000, with buying momentum intensifying ahead of each price breakout. This indicates a robust demand that is grounded in actual capital movement rather than speculative actions in the derivatives market, suggesting that the rally is built on a strong foundation.

While BTC is currently in a consolidation phase, experts emphasize the necessity of continued spot buyer dominance to successfully challenge significant resistance levels close to its historical peak.

Positioned in a Mature Bull Cycle

Conversely, the derivatives market has exhibited a cautious approach, as seen in the Spot Premium, which measures the difference between the spot price of Bitcoin and the average prices of several perpetuals and futures contracts. The Spot Premium has remained in positive territory since BTC surpassed $80,000 during this rally.

Additionally, there has been a decline in open interest for perpetual futures, signaling a short squeeze as traders are forced to close out their bearish positions. This shift from a bearish to a bullish market has left those betting against the uptick in bitcoin’s price unexpectedly liquidated as excessive leverage is removed from the market.

“The occurrence of consecutive squeezes on both sides of the trading spectrum highlights a significant insight: the rally appears to be progressing in a healthy manner. The elimination of over-leveraged participants has recalibrated market positioning, fostering a more sustainable environment for ongoing growth,” analysts remarked.

Such dynamics typically emerge during the initial phases of an enduring bullish movement. Analysts have identified this as a conjunction of spot accumulation alongside a cleansing of the derivatives market. With the current bitcoin rally solidifying its foundation, the market is transitioning from speculative leverage to structural buying, which is expected during the phase of a mature bull market.