Binance’s Spot-to-Futures Ratio Reaches Highest Level in 1.5 Years as Bitcoin Surpasses $109K

Bitcoin is experiencing an upward trend as it has successfully recaptured an important price point. Most recently, BTC briefly surpassed $109,000; however, it has since adjusted, trading at $108,959, reflecting a 3.5% rise over the past day.

This positions the asset under 1% from its peak of $109,958 noted in January. The surge is building on a series of weeks marked by steady price increases, indicating a sustained optimistic outlook among investors. Nevertheless, while the price momentum appears robust, market indicators reveal a more complex situation beneath the surface.

Recent analysis by CryptoQuant analyst Maartunn reveals a change in trading dynamics, particularly on Binance, the leading cryptocurrency exchange based on trading volume.

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Surge in Bitcoin Futures Activity as Spot-to-Futures Ratio Reaches 1.5-Year Peak

In Maartunn’s latest QuickTake update titled “Spot to Futures Ratio (Binance) Hits 1.5-Year High,” the analyst observed that the ratio of spot to futures volume has reached 4.9, its highest in 18 months.

On May 12, Binance registered $30.17 billion in spot trading against $115.56 billion in futures trading. This 4.9x disparity suggests that speculative trading, typically driven by leverage, is currently outpacing direct purchases seen in spot markets.

The Spot to Futures Ratio provides a view into the relationship between actual asset acquisitions and speculation via derivatives. A higher ratio implies that trading is more focused on futures markets, where traders speculate on price fluctuations without possessing the underlying asset.

This trend generally indicates short-term sentiment rather than long-term confidence. Although high futures activity can intensify market fluctuations in either direction, it may also indicate caution, as traders are hedging rather than building positions. The ongoing gap in volumes between spot and futures indicates that speculative leverage is central to Bitcoin’s existing rally.

Profitability Distribution Indicates Market Stability

Meanwhile, blockchain metrics from another CryptoQuant analyst, Crazzyblockk, provide additional context about the overall market sentiment. His findings reveal that profitability among different investor groups remains elevated: wallets holding BTC for under a month have realized gains of 6.9%, while short-term holders (less than six months) are seeing gains of 10.7%.

Despite these significant profit margins, there has not been a notable indication of widespread profit-taking or forced selling. The Unrealized Profit/Loss (UPL) Ratio shows that while most of the network is profitable, the distribution of these gains among various investor factions is relatively balanced.

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This type of balanced profitability has historically been linked to reduced volatility and a lower likelihood of abrupt corrections. Crazzyblockk noted that in past cycles, significant profit concentration among certain groups, typically short-term holders, often preceded major sell-offs.

However, the current market structure appears more stable, lacking signs of excessive selling pressure. Even though macroeconomic factors and external volatility remain elements to consider, the combination of strong price moves, consistent accumulation, and limited distribution suggests that the market could be on the verge of a new phase, potentially leading to a breakout beyond Bitcoin’s previous all-time high.

Featured image created with DALL-E, Chart from TradingView