Bitcoin’s recent struggle to break free from a narrow trading range has sparked discussions among analysts regarding the primary drivers affecting its price. Contrary to widespread belief that spot Bitcoin ETF flows are primarily responsible for this stagnation, some experts argue that the derivatives market continues to play a significant role, especially as activities in futures trading slow down.
CryptoQuant analyst Darkfost highlighted that Bitcoin futures volumes have drastically declined, reporting a drop from $123 billion in daily volume on November 22 to approximately $63 billion. This reduction, according to Darkfost, clarifies the low volatility seen in Bitcoin’s price lately. He noted that futures trading still dwarfs the activity seen in spot Bitcoin ETFs, which have been experiencing outflows totaling around $3.4 billion daily—a figure that is nearly 20 times smaller compared to futures trading.
The analyst stressed that while ETF outflows can add to market pressure, they are not the principal force influencing Bitcoin’s current price dynamics. By examining net taker volume—a metric that can indicate whether more aggressive buying or selling is taking place—Darkfost provided further insight into the market situation. Historical patterns revealed that whenever net taker volume turned negative, Bitcoin often entered a corrective phase dominated by selling. Since July, net taker volume has largely remained negative, with recent weeks seeing selling volumes keeping Bitcoin trapped within its current range.
Despite these challenges, there are signs that selling pressure from futures may be waning. Darkfost reported a notable decrease in futures-driven selling pressure from early November, with net taker volume improving from approximately -$489 million to -$93 million. He classified this as a promising sign, although it hasn’t yet led to a significant change in market conditions, emphasizing the limited liquidity in both the ETF and spot markets.
In a broader context, Julio Moreno, Head of Research at CryptoQuant, pointed out that understanding Bitcoin’s market cycles should shift towards demand rather than merely price performance. He indicated that demand for Bitcoin has been contracting on a monthly basis and is showing signs of slowing down annually. This dwindling demand signals potential challenges ahead for Bitcoin’s price trajectory.
Additionally, the behavior of long-term holders (LTHs) has emerged as another element influencing Bitcoin’s weaker performance compared to traditional assets like stocks and gold. While recent reports suggested that LTHs had halted their selling, on-chain analysts provided a more nuanced view, indicating that the selling continues but at a slower rate. Leading Glassnode analyst CryptoVizArt mentioned that LTHs are still liquidating about 7,300 BTC per day but at a reduced pace, representing a cooldown after extensive distribution.
Darkfost acknowledged the continual selling from LTHs but emphasized a differing perspective, suggesting the current balance between BTC being sold and that transitioning into long-term held status indicates a potential stabilization phase.
At present, Bitcoin’s value stands at $87,972, reflecting the ongoing challenges and dynamics within these complex market structures. The interplay between derivatives trading, demand fluctuations, and the actions of long-term holders will continue to shape Bitcoin’s price movements in the near future.
