Key Takeaways
Why are Binance investors shifting from futures to the spot market?
After heavy liquidations, investors became cautious: trading volumes on the spot market rose to $5 billion to $10 billion daily.
What Does Binance’s Exchange Supply Ratio Drop Mean for Bitcoin?
The ESR hitting the 2022 low (0.03) shows reduced short-term supply and stronger holding behavior, which is often seen before a major BTC recovery.
Since the price of $ 116,000 after the recent crash, Bitcoin [BTC] is struggling to maintain upward momentum. At the time of writing, Bitcoin was trading at $107,716, marking a decline of 4.08% in the past week.
Amid this bearish market trend, investors have become cautious and shifted from the futures market to the spot market.
Spot market traders are making a comeback
According to DonkerfostAfter a cascade of forced liquidations on October 11, investors have abandoned Futures and returned to Spot.
Since October 10, cumulative spot volume has increased and stabilized between $5 billion and $10 billion per day.
Source: Cryptoquant
Previously, especially in September, the volume was between $3 billion and $5 billion. Such a huge increase signals a renewed interest in spot trading, reflecting investors’ cautious approach.
Furthermore, Bitcoin’s supply ratio on Binance has fallen to 0.03, the lowest level since mid-2022.
Such a decline indicates that the short-term supply available for sale is steadily declining, a recipe for reduced selling pressure.
Source: CryptoQuant
Historically, a decline in the ESR signals a shift in the market behavior of large holders toward accumulation.
Often this pattern corresponds to the late accumulation phases of market cycles, where long-term investors increase their positions.
Therefore, investors returning to the spot market could lay the foundation for a new and more lasting bullish recovery.
Historically, previous market cycles have indicated that a period of spot accumulation precedes the price recovery.
But what’s holding BTC back?
Interestingly, whales and sharks remain indifferent while investors have returned to the place to accumulate, resulting in lower ESR.
To this extent, the Exchange Whale Ratio has risen to a monthly high of 0.556, indicating that large holders are actively depositing Bitcoin on exchanges.
Source: CryptoQuant
This selloff is mainly led by those who own 100 to 1,000 BTC (sharks), whose exchange rate change remained high around 117,000 BTC.
Source: Checkonchain
Furthermore, the Bitcoin Fund Flow Ratio has increased to 0.11, further confirming our early observation about increased stock market participation.
Source: CryptoQuant
Historically, greater flows into exchanges, especially from large entities, have preceded poor price performance.
This is because currency deposits create downward pressure if demand fails to keep pace and absorb it.
A break or a breakout?
According to AMBCrypto, Bitcoin is experiencing a fierce battle between bulls and bears for market control.
While investors have returned to Binance to accumulate, spending elsewhere, especially whales, remains high.
These two conflicting forces leave the market at a crossroads and indicate a possible long-term consolidation. Therefore, if these conditions persist, we could see BTC trading within a thin range between $106,071 and $114,039.
Conversely, if the pick-up in demand on Binance holds and absorbs the resulting selling pressure, BTC could break through these levels and target $116,000.