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Bitcoin (BTC) Futures Trading Dominated by Retail Investors: What Does This Mean?


u.today 24 December 2021 14:56, UTC
Reading time: ~2 m

Ki Young Ju, CEO and founder of top-tier on-chain analytics dashboard CryptoQuant, shared the dynamics of inflows of Bitcoins (BTC) on major derivatives exchanges. It looks like whales are avoiding trading futures in the last days of 2021.

Bitcoin (BTC) futures trading volume comes from retail

Mr. Ki Young Ju has taken to Twitter to share the charts of Bitcoin (BTC) flow between spot exchanges and derivatives trading platforms (30-day moving average).

$BTC futures traders now are mostly retail investors.

The average amount of #Bitcoin deposits to derivative exchanges from other exchanges is still relatively small.

Live Chart ūüĎáhttps://t.co/N7kJnbw9ks pic.twitter.com/XTicbXmKRm

‚ÄĒ Ki Young Ju ž£ľÍłįžėĀ (@ki_young_ju) December 24, 2021

It looks like the inflow on derivatives platforms is at its lowest since 2018. As such, it is most likely driven by small-sized retail investors.

Usually, this is a reliable bearish indicator. On the chart showing the Bitcoin (BTC) price (displayed on a logarithmic scale), huge whale-driven inflows coincided with the upsurge of the Bitcoin (BTC) price.

The most impressive flow of whales' capital to derivatives exchanges was registered after Black Thursday in Crypto. Also, whales injected a massive amount of money in Q3, 2021, when the Bitcoin (BTC) price doubled in three months.

Accumulation or distribution?

As covered by U.Today previously, this indicator worked perfectly in September 2021. Since early September, Bitcoin (BTC) whales moved coins to futures exchanges to open new positions or fill up the margin.

Also, CryptoQuant analysts revealed that some whales are dumping their Bitcoins (BTC). Thus, traders should stay super-vigilant until Bitcoin (BTC) holds over $51,000.

At the same time, things might not be that bad for Bitcoin (BTC) bulls. As per Glassnode data, the capitulation phase (when the Bitcoin price dumped to $42,200) is over, and the Bitcoin Liquid Supply Change indicator has entered the bullish zone.

Also, the "Fear and Greed Index" has left "Extreme Fear" waters.

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