BTC’s rally from the early February low has been largely driven by the resurgence of derivatives markets.

Despite a difficult macro backdrop, with persistent geopolitical tensions and economic data continuing to deteriorate to the point where rate hike expectations are rising, traders still chose to increase their exposure.

This behavior may simply be technical in nature, as Bitcoin’s sharp correction likely created an attractive rebound opportunity for traders.

Contrary to what the notional Open Interest may suggest, futures activity remains elevated.

If we look at Open Interest in Bitcoin value terms, Binance alone has seen it rise from 94,000 BTC to around 120,000 BTC today, showing that the trend is still ongoing.

What really matters to monitor, however, is the buying pressure on derivatives markets, and this is where things become problematic.

After peaking at 1.04 on March 31, Binance’s Taker Buy/Sell Ratio (30 DMA) has collapsed and now sits at 0.94.

This indicates that over the past two months, investors progressively started switching sides even as BTC continued moving higher.

As of today, there is now more sell pressure in Binance futures order books than actual buying pressure.

This imbalance is weighing on Bitcoin while spot demand remains extremely weak.

It is likely one of the reasons why the price barely reacts even when Michael Saylor continues buying Bitcoin, as he himself recently mentioned in an interview.

Written by Darkfost