Bitcoin made a satisfying rally from 60k to 83k. But it is very important to understand if this rally came from the SPOT side or from the DERIVATIVES side.

1️⃣Let's start by looking at the derivatives side.

❌First, in the move from 60k to 83k, we do not see a meaningful increase in open interest, volume, or basis in CME futures, where institutions and funds trade. Instead of a lasting and strong expansion that followed the price rally, it mostly stayed wavy inside a range.

❌In a similar way, there is also a drop in open interest and volume in CME options.

❌From 60k to 83k, funding rates in PERP derivative contracts on centralized exchanges also stayed negative, and the derivative price stayed behind the spot price.

❌There was also no meaningful increase in open interest in Deribit options.

❌Also, while IV and RV were at very low levels and compressed, the price moved up from 60k to 83k.

2️⃣Now let's look at the SPOT side.

✅In SPOT ETFs, it is very clear from the chart that buying came during this period.

✅Even though the Coinbase Premium Index sometimes fell into the negative area, in general it recovered and stayed positive.

✅Centralized Exchange Cumulative Volume Deltas (CVDs) moved up during this whole period.

The RESULT is very clear: This rally was a spot-driven rally. It was not a rally pumped by leverage from the derivatives side.

On the derivatives side, there was more disbelief, lack of interest, and hedging behavior.

Spot ETFs followed the general rally in NASDAQ, and BTC also moved up together with NASDAQ.

Spot-driven rallies are actually rallies with a strong base.

But still, the fact that there was no excitement and belief on the derivatives side makes this rally a rally with one missing leg.

My preference is to see a rally where there is both excitement in derivatives and strong spot buying.

Written by CryptoMe