Binance“>Binancealong with other Cryptocurrency exchanges, broke records in Bitcoin (BTC) futures contracts, according to CryptoQuant analysis.
The firm notes that, in general, when the BTC derivatives market “heats up,” especially in the futures segment, along with a significant price increase, “the market may experience increased volatility.”
According to the datathe BTC futures market has reached new highs in terms of trading volume, reflecting the growing interest and speculative activity around the leading digital currency.
The BTC futures market has reached new highs in terms of trading volume. Source: CryptoQuant.
This occurs in a context where bitcoin has undertaken a bullish rally, taking its price to touch new all-time highs. The latest All-Time High (ATH) recorded for BTC is $93,000.
The rise in BTC futures contracts implies several dynamics for the market and investors. For example, it points to greater speculative participation, where traders seek to profit from price fluctuations by buying and selling contracts who speculate on the future price of the currency. This can increase market liquidity and depth, but at the same time, introduces additional volatility.
In parallel, BTC’s recent momentum has been driven by massive capital inflows into ETFs. This week, these funds have accumulated at least USD 2 billion, according to data by SosoValue.
Massive inflows into ETFs have influenced the rise of bitcoin. Source: SosoValue.
CryptoQuant analyst Crazzyblockk notes that the BTC futures market, especially the BTC/USDT pair, “has become exceptionally overheated.” Recent metrics show that BTC/USDT trading volume has reached new peaks, he noted.
He details that Binance, with most of this volumeleads the futures trading activityhaving recorded a volume of USD 50.2 billion in the last few days, within a total of USD 129 billion in accumulated futures volume for BTC/USDT across all major cryptocurrency exchanges centralized.
This scenario suggests that while interest and volume in futures may briefly boost BTC demand and price, It could also lead to minor pullbacks and abrupt fluctuations. Increased volatility could be a signal to investors and traders to proceed with caution.
This article was created using artificial intelligence and edited by a human Editor.
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