Bitcoin (BTC) price is showing early signs of renewed buyer activity following February’s heavy sell-off, but weak participation in derivatives markets is raising concerns that the current move may lack durability.
Spot Markets Flip Positive After Monthly Slump
Bitcoin is showing early signs of buyer resurgence on major spot exchanges following heavy selling in February, according to CryptoQuant data. Volume delta on Binance and Coinbase has flipped positive after deep negative readings last month.
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This marks a reversal from mid-February, when both retail and institutional participants were heavily positioned on the sell side.
CryptoQuant’s analysts describe the change as an early but still tentative signal. Buyer dominance remains modest, and overall market liquidity continues to be relatively thin. As a result, the trend requires further confirmation as liquidity across the crypto market remains relatively thin.
The shift comes against a challenging macro backdrop. Bitcoin has shown relative resilience compared with equities and commodities, even as geopolitical tensions in Iran weigh on global markets.
At the same time, expectations for the upcoming Federal Reserve meeting point to a near-certain pause in interest rates, with investors instead focused on forward guidance and the possibility of renewed tightening.
On-Chain Indicators Signal a Turning Point
Despite these pressures, several on-chain indicators suggest that market conditions may be stabilizing.
According to CryptoQuant’s Head of Research Julio Moreno indicated, several high-conviction signals have flipped bullish for the first time in weeks.
Most notably, the aggressive selling pressure from U.S.-based entities has vanished, trader losses recently reached extreme levels, and long-term holders have largely halted their distribution. Historically, this combination has appeared near local market bottoms.
Futures Divergence Raises Caution
However, not all signals are aligned. A separate analysis from CryptoQuant points to a divergence between Bitcoin’s price and open interest in the futures market.
While spot prices are attempting to break above the $74,000 resistance level, futures traders remain cautious.
“If this lack of bullish positioning in the futures market continues, the current move could turn into a bull trap,” analysts warn.
The imbalance is significant given the growing dominance of derivatives. The futures market, roughly 10 times larger than spot since stablecoin adoption in 2018, makes it a critical driver of price direction.
“This dynamic should not be underestimated,” says CryptoQuant report. “Historically, a true bull market tends to begin when both spot and futures markets show synchronized strength,”
Why This Matters
The divergence shows Bitcoin’s rally may be weak and could pull back soon. Traders should watch futures closely, because lasting gains need both spot and futures markets to rise together.
Divergence occurs when spot prices rise, but futures traders stay cautious. It can signal that the rally lacks broad support and may reverse
A bull trap is a situation where prices appear to be rising, attracting buyers, but then quickly reverse, leading to losses for late entrants.
Bitcoin often reacts to global events like interest rate decisions, geopolitical tensions, and market sentiment, which can influence demand and risk appetite.
