Binance Trading Volume Data Hints Short-Term Price Surge for Bitcoin

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Bitcoin (BTC) recently surged past $62,000 following a decision by the U.S. Federal Reserve to lower interest rates by 50 basis points. This move, the first rate cut in four years, led to a boost in the cryptocurrency market, with Bitcoin leading the charge. 

However, data from Binance, the largest crypto exchange, suggests that this rise might be temporary and hints at a short-term price peak.

Binance Trading Volume Signals Short-Term Peak

Binance saw a massive $85 million in spot trading volume within one hour—the highest in over three months. According to data from Glassnode, a significant rise in spot volume on Binance has often been followed by a pullback in Bitcoin’s price. 

Similar spikes in volume occurred in August and were followed by drops. This pattern suggests that Bitcoin’s current surge could be short-lived.

Recent activity also shows that short-term Bitcoin holders, those who have owned BTC for less than 155 days, are taking profits. Over $750 million worth of Bitcoin was sent to exchanges for selling, the second-highest amount since August. 

This strategy of selling during price increases supports the idea of a short-term peak, with many traders cashing out while prices are high.

CME Traders Increase Short Positions

David Zimmerman from K33 pointed out that CME traders have increased their short positions by 5,500 BTC in the last two days. This shift suggests that traders are preparing for possible market volatility, especially with the recent Federal Open Market Committee (FOMC) meeting. 

Zimmerman noted that falling premiums in CME futures and rising funding rates in perpetual futures are typically negative short-term signals for Bitcoin’s price.

U.S. Bitcoin Spot ETFs Face Outflows

Interestingly, while Bitcoin’s price climbed, U.S. Bitcoin spot ETFs faced net outflows of $52.7 million according to Spotonchain. ARK 21Shares Bitcoin ETF led the outflows with $43.4 million, followed by Grayscale Bitcoin Trust and Bitwise Bitcoin ETF. 

However, Grayscale Bitcoin Mini Trust saw net inflows of $2.7 million, bucking the overall trend.