Binance Data Reveals Bitcoin Price Slide Despite Spot Buyer Demand
Binance Data Reveals Bitcoin Price Slide Despite Spot Buyer Demand
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Analysis of Binance trading data highlights a puzzling phenomenon: Bitcoin prices are sliding even as spot buyers are actively placing bids in the market. The article delves into the concept of Bitcoin's finite supply contrasting with the much larger, rapidly adjustable synthetic exposure traded in the marginal market, which can be created or reduced instantly.
Bitcoin’s hard cap is easy to understand: there will only ever be 21 million coins. What's hard to understand is that the marginal market is allowed to trade far more than 21 million coins worth of exposure, because most of that exposure is synthetic and cash-settled, and it can be created or reduced in seconds.