Bitcoin [BTC] has traded within a relatively narrow range between $68,936 and $71,751. As the price consolidates within this range, the key question is whether the asset will break higher or move downward once it leaves this range.
With derivatives activity accounting for the majority of market involvement, positioning has become a primary indicator of short-term price direction among futures traders.
The volume of derivatives is shifting in favor of sellers
Bitcoin’s net derivatives trading volume has turned negative for the first time in months, signaling a shift in market control.
Net Taker Volume data shows that derivatives activity was buyer led from November through January, with net volume remaining positive at approximately $36 million. This trend has reversed in the past month.
At the time of writing, net volume was $270 million in favor of the sellers, according to data from CryptoQuant. This reflects increased sell-side pressure across all derivatives markets.
Source: CryptoQuant
The shift is also visible on Binance, which is responsible for the majority of Bitcoin derivatives trading. The exchange’s Taker Buy Sell Ratio, a metric used to assess whether aggressive buying or selling dominates, indicated seller control.
The ratio uses 1 as the neutral threshold. Values above 1 indicate buyer dominance, while values below 1 indicate concentrated selling.
Despite Binance recording a trading volume of $20.3 billion, the ratio was 0.97. This confirms that taker sell orders continue to dominate.
Long positions persist despite declining market liquidity
While derivatives volume favors sellers, positioning data paints a more nuanced picture.
Funding rates on the exchanges have turned slightly positive, indicating that long traders are paying to maintain their positions. Data from CoinGlass showed a funding rate of 0.0010% at the time of writing, indicating expectations of upward price movement.
Positive funding rates typically arise when demand for long positions increases, often accompanied by increased speculative activity around key price levels.
Source: CoinGlass
Strikingly, this concentration of long positions persists even as the total capital in the Bitcoin perpetual futures market declines. At the time of writing, Open Interest (OI), which measures the total value of outstanding contracts, fell by $725 million in the past day.
A decline in OI often reflects reduced risk appetite and uncertainty about the short-term price direction. Despite this contraction, traders continue to position for upside potential, indicating there is residual belief in Bitcoin’s potential for a recovery.
Spot and ETF flows remain a critical variable
Spot market activity and flows into spot Bitcoin ETFs remain key indicators of continued upside potential.
The recent spot flows are largely not supporting the bullish momentum. On February 6, approximately $1.04 billion worth of Bitcoin was sold on the market, marking the largest single-day sell-off in recent weeks. MintGlass. This was followed by a temporary net purchase of $431 million.
However, additional selling pressure of $177.8 million emerged between February 8 and 9, indicating that bearish activity is still present. Spot activity has yet to return to the consistent, daily dominance seen in December.
Source: Sosowaarde
ETF flows reflect this weakness. Spot Bitcoin ETFs have recorded net outflows of $173 million so far this month, marking the fourth straight month in which net turnover has exceeded inflows.
Until both the spot and derivatives markets show continued bullish participation in the short and long term, Bitcoin’s momentum is likely to remain subdued.
Final thoughts
- Market data shows that Bitcoin trading volume is focused on sellers, while capital positioning remains concentrated in long contracts.
- Broader capital inflows into spot Bitcoin have slowed, adding to uncertainty around the asset’s next price move.