Key Takeaways
Why are Binance investors shifting from Futures to the Spot market?
After heavy liquidations, investors grew cautious—spot trading volumes surged to $5–10B daily.
What does the drop in Binance’s Exchange Supply Ratio mean for Bitcoin?
The ESR hitting 2022 lows (0.03) shows reduced short-term supply and stronger holding behavior, often seen before major BTC recoveries.
Since hitting $116k following the recent crash, Bitcoin [BTC] has struggled to keep an upward momentum. As of this writing, Bitcoin was trading at $107,716, marking a 4.08% decline over the last week.
Amid this market bearish trend, investors have turned cautious and shifted from the Futures market to the Spot market.
Traders in the Spot market make a comeback
According to Darkfost, after a cascade of forced liquidation on the 11th of October, investors have deserted Futures and returned to Spot.
In fact, since the 10th of October, cumulative spot volume has surged and stabilized between $5 billion and $10 billion daily.
Source: Cryptoquant
Previously, especially in September, volume ranged between $3 billion and $5 billion. Such a massive surge indicates renewed interest in Spot trading, reflecting investors’ cautious approach.
On top of that, Bitcoin’s Supply Ratio on Binance has declined to 0.03, hitting the lowest levels since mid-2022.
Such a decline suggests that the short-term supply available for sale is steadily decreasing, a recipe for reduced selling pressure.
Source: CryptoQuant
Historically, a decline in ESR has indicated a shift in large holders’ market behavior, as they turn to accumulation.
Often, this pattern aligns with the late accumulation phases of market cycles, with long-term investors raising their holdings.
Therefore, investors returning to the spot market could lay the ground for another and more sustainable bullish recovery.
Historically, previous market cycles have indicated that a period of spot accumulation precedes price recovery.
But what’s holding BTC behind?
Interestingly, while investors have returned to the spot to accumulate, resulting in lower ESR, whales and sharks remain indifferent.
Inasmuch as so, the Exchange Whale Ratio has surged to a monthly high of 0.556, suggesting that large holders are actively depositing Bitcoin to exchanges.
Source: CryptoQuant
This selling spree is particularly led by those holding 100 to 1k BTC (sharks), whose Exchange Balance Change remained elevated around 117k BTC.
Source: Checkonchain
Additionally, the Bitcoin Fund Flow Ratio has spiked to 0.11, further validating our early observation on increased exchange participation.
Source: CryptoQuant
Historically, higher flow into exchanges, especially from large entities, has preceded poor price performance.
This is because exchange deposits cause downward pressure if demand fails to keep pace and absorb them.
A break or breakout?
According to AMBCrypto, Bitcoin is experiencing a fierce battle between bulls and bears for market control.
While investors on Binance have returned to accumulate, spending elsewhere, especially from whales, remains elevated.
These two conflicting forces leave the market at a crossroads and signal a potential prolonged consolidation. Therefore, if these conditions persist, we could see BTC trade within a thin margin between $106,071 and $114,039.
Conversely, if the demand picking up on Binance holds up and absorbs the arising sell pressure, BTC could breach these levels and target $116k.