Bitcoin investors saw the difference between spot price and derivative prices on Binance break a record. Investors are also trying not to take risks as it has reached unprecedented levels in recent years. Transactions in the derivatives markets present a rather negative indicator when looking at current price levels.
What does the price gap mean for Bitcoin
CryptoQuant’s latest reports reveal the largest price difference ever recorded in the derivatives market on Binance. Bitcoin derivatives are tracking prices at all-time highs. Meanwhile, the difference between spot market and derivative market prices shows a big difference.
The trend shown by Bitcoin derivatives also reflects inflation expectations. However, it also reveals global macroeconomic developments. On January 24, Bitcoin derivatives traded $62.40 below the spot price. CryptoQuant analyst Darkfost states that this is a change depending on macroeconomic conditions. “This change is based on macroeconomic data published by the US central bank, the FED. “Therefore, we can see it as the result of an analysis on future interest rate cut expectations and inflation-related projections,” he said.
In particular, key inflation indicators such as the Consumer Price Index (CPI), Producer Price Index (PPI) and Personal Consumption Expenditure Index (PCE) in the USA are very influential on the general trend of the markets. PCE data is expected to be announced on January 31. The FED will make its final decisions on possible changes to interest rates.
The weakness experienced at the end of the fourth quarter of 2023 caused Bitcoin prices to frequently test the $90,000 support. Low confidence in derivatives markets does not offer any attraction for investors despite taking risks based on short-term price movements. CryptoQuant notes that current market conditions do not match the traditional patterns of Bitcoin’s bullish cycle. In the past, during bull markets the spread between spot and derivative prices has tended to return to neutral territory. Darkfost said, “A negative spread this large would usually be a sign of a strong buying opportunity. Because the market often overreacts. “After this process, it will stabilize.”
What’s next for BTC price?
The $90,000 support level for Bitcoin price is at a very critical point. CryptoQuant analyst Yonsei Dent stated that the critical supports for Bitcoin speculators are not only $ 100 thousand.
Short-term investors are currently in profit on average. This is valid as long as Bitcoin price remains above the $96,400 level. If the BTC/USD price falls below this level, short-term investors who hold for a week to a month will begin to suffer losses. Additionally, the critical support level is important for those who invest between one and three months. It is stated that this support is 95 thousand 900 dollars. If it falls below the $96,400 support level, short-term investors will be in trouble. In this case, a strong net loss will occur.
“As volatility decreases, the $89,900 level becomes even more important,” he said, underlining that larger price movements for Bitcoin should be watched carefully, especially as technical and on-chain support. It is stated that this level determines the psychological limits of Bitcoin investors and may further affect the reactions to price movements.
In conclusion, the Bitcoin price gap on Binance shows that the market is still in uncertainty. Investors expect more stable movements, avoiding price fluctuations, resulting in greater market sentiment. This situation provides important clues about what direction the current market structure will take in the future.
