The US Federal Reserve’s public consideration of a reduced interest rate cut in 2025 has caused many negative effects on the financial markets. Despite the 17% price loss of Bitcoin, data from the Binance exchange shows that the BTC market has now developed its largest price gap ever.
Bitcoin Spot-Perpetual Gap Falls To $59 – What’s Next?
Last week, the Fed announced a possible reduction of its originally planned four rate cuts in 2025 to two, triggering a broad selloff in global financial markets. With the total crypto market down 17.4%, more than $1.8 trillion was lost on the stock market in a single day as investors looked to unload risky assets from their portfolios, marking the worst daily decline since March 2020.
For the Bitcoin market, CryptoQuant analyst Darkfost reports a significant increase in selling pressure from the derivatives market, resulting in an unending price gap of $59.14, the largest ever in BTC history.
In context, the permanent price gap represents the difference between the price of the cryptocurrency in the local market (where the asset is sold directly) and its future price in perpetuity (contracts that predict the future value of the asset without expiration).
A negative gap means that the futures are trading at a lower price than the spot market indicating bearish sentiment in the derivatives market. Therefore, the current negative price gap of $59.14 suggests that derivatives traders expect a short-term decline in the price of Bitcoin.
However, Darkfost notes that the persistent price gap may be historically reversed as markets stabilize. Therefore, extreme negative positions such as the one presented now are often good buying opportunities as markets tend to overreact during periods of high uncertainty before recovery is found.
BTC Investors Record Over $5.72 Billion Profits Amid Price Drop
In other news, crypto analyst Ali Martinez reports that the Bitcoin market witnessed more than $5.72 billion in profits during the recent market crash. This shows that a significant portion of Bitcoin owners were profitable before the price correction, which resulted in profit taking.
Although the large profit observed may indicate a cautious or bearish sentiment in the short term, they also suggested that the previous price rally of bitcoin was strong enough to benefit many investors who believe in a strong bullish structure that is sustainable in the long term.
At the time of writing, Bitcoin is valued at $97,182 with a gain of 0.83% over the past day. However, the trading volume of the commodity decreased by $50.28% and is worth $54.23 billion.
Featured image from the Economic Times, chart from Tradingview