I have previously analyzed market trends driving Bitcoin’s price increases through the Fund Flow Ratio. In earlier observations, I noted that the Bitcoin bull cycle, which began in the first half of 2023, was initially led by the futures market. This was followed by a surge in spot market activity, which fueled additional price increases.
Starting in March 2024, both the futures and spot markets experienced a prolonged period of reduced trading activity. However, since October, trading volumes in both markets have risen simultaneously, driving Bitcoin’s upward price momentum.
More recently, while futures market activity has declined, spot market demand continues to increase. This suggests that speculative excess in the futures market is cooling, while buying pressure in the spot market is gaining strength. Looking ahead, the futures market is likely to undergo cycles of overheating and liquidations, which will contribute to Bitcoin’s price growth. This price movement will, in turn, encourage further capital inflows into the spot market.
Analyzing the funding rate using a 30-day exponential moving average (EMA), there are no visible signs of late-cycle overheating. This indicates that Bitcoin’s upward trajectory is likely to continue, with significant room for further growth.
Written by Avocado_onchain
