Binance trading data reveals why Bitcoin prices are sliding even as spot buyers flood the market with bids
Bitcoin’s exhausting cap is simple to know: there’ll solely ever be 21 million cash.
What’s exhausting to know is that the marginal market is allowed to commerce way over 21 million cash value of publicity, as a result of most of that publicity is artificial and cash-settled, and it may be created or lowered in seconds.
That distinction has develop into Bitcoin’s core paradox in the previous 12 months or so.
Scarcity is a property of the asset, whereas price is a property of the market microstructure that dominates the subsequent aggressive order. When derivatives quantity and leveraged positioning develop into the dominant enviornment, Bitcoin can commerce like an asset with a good provide and, at the identical time, like an asset with successfully elastic publicity.
21 million cash, however a a lot bigger marginal market
Spot is the solely venue the place a commerce essentially strikes precise BTC from one proprietor to a different.
Perpetual and dated futures do not mint cash, however they do create a second market that may develop into bigger, sooner, and extra reflexive than spot. Perps are designed to trace spot by way of a funding mechanism and could be traded with leverage, which implies a comparatively small quantity of collateral can management a a lot bigger notional place. That mixture tends to tug exercise into derivatives when merchants need velocity, leverage, shorting potential, and capital effectivity.
Price discovery is solely the place the subsequent significant market order lands. If most urgency lives in perps, then the path of least resistance is about there, even if long-term holders by no means contact leverage and even if the underlying provide is mounted. In that regime, strikes are continuously pushed by modifications in positioning: liquidations, pressured de-risking, hedging flows, and the fast repricing of leverage. Those flows can overwhelm the a lot slower strategy of spot accumulation, as a result of the marginal actor is not selecting whether or not to purchase cash however whether or not so as to add or cut back publicity.
This can be why seen order e book assist is a weaker idea than it appears on a chart. Displayed bids could be actual, however they’re conditional. They could be pulled, layered, refreshed, or just outpaced by the quantity coming from the bigger derivatives advanced. Order books are data of resting intent, not execution ensures.
What the data reveals
The Binance BTC/USDT perpetual futures versus spot quantity ratio is the cleanest place to begin as a result of it quantifies the place exercise is concentrated.
On Feb. 3, the perpetual-to-spot quantity ratio learn 7.87, with $23.51 billion in perpetual quantity in opposition to $2.99 billion in spot whereas BTC traded round $75,770. On Feb. 5, the ratio was nonetheless 6.12, with $15.97 billion in perps quantity in opposition to $2.61 billion in spot, and the price near $69,700.
The ratios matter as a result of they don’t seem to be a minor skew; they describe a market the place the dominant supply of turnover is a leveraged, shortable venue. In that setup, the subsequent tick is extra more likely to be set by the repricing of publicity than by incremental spot shopping for.
The aggregated order e book liquidity delta provides a second layer: not simply the place quantity traded, however the place liquidity collected close to value. CoinGlass defines depth delta as the imbalance between bids and asks inside a specified vary, right here ±1% round the present value, which is a option to summarize whether or not the seen e book is bid-heavy or offer-heavy.
The largest footprint seems on the derivatives aspect proper as the market was getting into the drawdown window. Futures liquidity delta printed +$297.75 million on Jan. 31 at 14:00 with BTC round $82,767. Spot later confirmed +$95.32 million at 18:00 round $78,893. Even by Feb. 5 at 14:00, spot delta nonetheless confirmed +$36.66 million with BTC close to $69,486.
This data reveals a market the place spot bids existed and, in some moments, grew, however value nonetheless stored sliding. Once you settle for the hierarchy the place derivatives are the dominant class, this stops being a contradiction. Displayed liquidity close to spot can enhance whereas the bigger derivatives venue continues to power repricing by way of leverage discount, brief stress, or hedging. When perps dominate turnover, the marginal vendor is not an actual person who’s misplaced conviction, it is only a supervisor managing positions.
Now add the third channel that buyers are inclined to deal with as the definitive spot proxy: US spot Bitcoin ETFs. The stream sequence we have seen in final week appears like a tug-of-war slightly than a steering wheel aimed toward the cliff.
Heavy outflows hit on Jan. 21 at about -$708.7 million, then Jan. 29 at about -$817.8 million, then Jan. 30 at about -$509.7 million. Feb. 2 flipped sharply constructive at about +$561.8 million, then reverted to -$272.0 million on Feb. 3 and -$544.9 million on Feb. 4.
Public stream tallies like these are extensively tracked by way of aggregators such as Farside and are continuously referenced in market protection, however they fail map one-for-one to intraday value when the derivatives venue is setting the marginal commerce.
It’s additionally value being exact about what an ETF stream is and isn’t. Creations and redemptions are executed by way of approved members. Depending on the product and regulatory permissions, these processes could be cash-based or in-kind, which modifications how immediately ETF exercise interprets into spot market transactions in BTC.
In mid-2025, the SEC authorized orders allowing in-kind creations and redemptions for crypto ETPs, which is particularly about permitting approved members to create or redeem shares utilizing the underlying crypto slightly than solely money, bringing the operational construction nearer to different commodity ETPs. (SEC) Even with that construction, ETF flows nonetheless sit alongside derivatives positioning, supplier hedging, and change liquidity, which might dominate short-horizon value formation.
Finally, change reserve data anchors this summary data into one thing extra tangible: the quantity of BTC sitting on exchanges, which is a proxy for instantly tradable stock.
From Jan. 15 to Feb. 5, all-exchange BTC reserves rose by 29,048 BTC, a 1.067% enhance, reaching simply over 2.75 million BTC.
This issues as a result of it separates two concepts that are usually blended collectively.
Bitcoin could be scarce in whole provide and nonetheless really feel properly provided at the level of transaction if change stock rises right into a risk-off window. ETF inflows could be constructive and but the tradable float can broaden through deposits, treasury strikes, or repositioning by giant holders. And even if the tradable float tightens, derivatives can nonetheless amplify volatility as a result of publicity could be added or eliminated sooner than cash can transfer.
A shortage mannequin that matches how Bitcoin trades
A helpful option to reconcile all of that is to deal with Bitcoin shortage as a stack of time horizons slightly than a single quantity.
At the slowest layer is protocol provide, which is mounted by design. That’s the layer the 21 million cap describes.
At the center layer is the tradable float, which is what can realistically hit the market with out friction. Exchange reserves aren’t the finest proxy for this, however they’re directionally helpful as a result of they measure cash that are already sitting on a platform constructed for fast transaction.
At the quick layer is the artificial publicity: perps, dated futures, and choices. This layer can broaden or contract extraordinarily rapidly as a result of it is constrained by collateral and danger limits, not by coin motion. When exercise concentrates right here, a big share of the market is expressing views by way of leverage and hedges, not by way of coin acquisition.
At the ultimate layer is the marginal commerce itself: the subsequent pressured purchase or promote that clears by way of the most lively venue. The perpetual-to-spot quantity ratios which were sitting between roughly 6 and eight, mixed with the bigger liquidity delta prints on futures, present a market the place that marginal commerce was occurring in derivatives, not in spot.
That framing tells us that shortage is actual, however it does not assure day-to-day tightness. The market can commerce scarce property by way of plentiful publicity, and the venue with the most pressing stream tends to set the subsequent value.
That’s why we have to deal with ETF flows, change reserves, and derivatives dominance as three separate lenses that may disagree in the brief run. When they line up, strikes are typically cleaner. When they diverge, you possibly can see precisely what the charts present: bids seem, narratives whip round, and value nonetheless bleeds as a result of the marginal market is elsewhere.
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