Binance Futures Volume Soars to Yearly Highs: What Does it Mean for BTC’s Price?

Binance, the current leader in centralized exchange trading volume, has cemented a leading position in the derivatives market as well.

While these numbers are strong, other benchmarks suggest that user activity may be dwindling.

Significant Dominance

Data analytics firm CryptoQuant shared a report from a community analyst, @JA_Maartun,
showcasing how the largest centralized exchange (CEX) is currently well ahead in futures trading volume.

The $2.55 trillion in futures volume was reached last month and is the highest level recorded for Binance this year, according to CQ’s graph. The previous peaks were in January, when it hit $2.43T, and May, which recorded $2.26 trillion. This jump followed a month of volatility and price records for both Bitcoin and a few altcoins, which likely brought in more traders.

OKX and Bybit also reported marginal volumes, with $929 billion and $1.09 trillion, respectively, and these figures have remained relatively similar throughout the year so far. The Changpeng Zhao-founded exchange remained the leader, by a wide margin, accounting for over half of the total volume across other major exchanges, including Kraken, Coinbase, Bybit, and others.

CryptoPotato reported that Binance was leading the charge in the derivatives market in April, and it’s evident that the momentum has remained strong. The increased levels of trading suggest that more users are participating in these markets, leveraging riskier strategies.

“The increase in trading suggests more users are active again, possibly due to the recent price breakout,” – noted Maartun.

What About Other Metrics?

Futures volume may be booming, but other key metrics point in a different direction. As CryptoPotato outlined on Monday, a Bitcoin sell-off resulted in $1.5 billion in liquidations, and the funding rates, a fee exchanged periodically between long and short positions in a perpetual futures contract, turned negative.

Negative funding rates indicate that there are more shorts than longs, which can be interpreted as more people betting on prices to fall rather than rise, which is more “risk off” sentiment.

Data collected at print time from the Token Terminal also suggests a decline in interaction with Binance, with active monthly addresses dropping from approximately 800,000 at the start of June to around 340,000 at the beginning of August, representing a 57.5% decrease.

This clash of positives in negatives seems to be in line with current market sentiment, which is in a “neutral” state. It has been a mixed bag of ups and downs for cryptocurrency prices as well, with the overall crypto market cap dropping to $3.7 trillion, from the $4T it reached in July, according to data from CoinMarketCap.