The net trading volume of Bitcoin on Binance has returned to positive after the correction in the market. Buying has once again surpassed selling on this exchange, which could be considered a bullish sign, especially since Bitcoin has stayed above $100,000.
When there is a positive delta in spot trading volume, it indicates new money might enter the market, or those already in are expecting the value to go up. More significantly, it means that there is less selling happening in the market now.
An Analysis of How Spot Volumes Enjoyed an Uptick
Just because spot volume goes up does not necessarily mean that prices will follow suit. When volume on spot Binance spikes too fast, it usually accompanies a high in the market.
There are two factors behind this pattern. When prices increase suddenly, a rush of excitement takes over, and investors look only at making more money, not at the risks. Many traders make use of the new frontiers in Bitcoin by taking advantage to sell their assets and collect their earnings. The combination of fear of missing out (FOMO) and profit-taking typically creates noticeable volume spikes, which can precede short-term reversals.
Still, the recent increase does not seem like too much yet. The increase in spot volume is occurring without a manic rise, which indicates that this is likely a regular consolidation rather than a buildup to a strong surge.
Why Binance Volumes Matter Most
Monitoring the number of trades on Binance allows traders to understand how the whole market is feeling. Recent statistics from CoinDesk reveal that Binance is responsible for more than 26% of the leading spot trading volume on the market. In turn, Bitcoin’s position ensures it can indicate the direction of retail and institutional investments.
In comparison to Coinbase, Binance trades higher volumes and reacts more quickly to changes in price. Changes in net volume on Binance often influence the Bitcoin price more than those happening elsewhere.
Government Bonds Go Forward
Since Bitcoin (BTC) is now over $100,000, the actions of spot traders will play a crucial role. When spot volume rises and sales fall, this could push prices higher. If word gets out that prices are rising quickly, it might mean many traders are ready to sell, which may point to a short-term peak.
Today, increased activity in spot markets looks to be a good sign rather than a bad one.
