Data on the Binance platform indicates an exceptional situation in the Bitcoin market at present, with the Futures Power Ratio showing a sharp increase in the strength of futures contracts compared to the normal movement of the spot market. The indicator has reached an exceptionally high value while the spot return remains in negative territory This reveals strong and unbalanced derivatives pressure driving the market in directions that do not reflect the true buying power on the spot trading platform.
The relationship between the spot market and derivatives is usually harmonious; when the price moves upward, support from perpetual contracts typically appears through increased trading volume and open interest, and when the price falls, this support diminishes. However, the current situation shows a clear disconnect: perpetual contract volume is exhibiting a significant downward shift, while the price is moving only slightly downward. Yet, the Futures Power Ratio is rising sharply, indicating that derivative liquidity has become the primary driver of market volatility rather than the strength of actual demand.
This pattern typically indicates intense speculative activity in the futures market, potentially driven by highly leveraged positions or attempts by large traders to influence short-term price movements. Historically, when derivatives trading volumes rise significantly while actual spot market volumes remain weak, the market enters a state of “instability,” becoming more sensitive to any adverse movement that could prompt well-funded traders to liquidate their positions quickly.
Written by Arab Chain
