The US Federal Reserve's public consideration of reducing interest rate cuts in 2025 had numerous negative effects on financial markets. Aside from a 17% price loss for bitcoin, data from Binance exchange shows that the btc market has now developed its largest perpetual spot price gap.
bitcoin Spot Perpetual Gap Falls to -$59: What's Next?
Last week, the Federal Reserve announced possible reductions from its four rate cuts initially planned for 2025 to two, triggering a large-scale sell-off in global financial markets. As the total cryptocurrency market capitalization fell 17.4%, more than $1.8 trillion was lost in the stock market in a single day as investors looked to dump risky assets from their portfolio, which represents the worst daily drop since March 2020.
For the bitcoin market, CryptoQuant analyst Darkfost information a notable increase in derivatives market selling pressure, resulting in a perpetual spot price gap of -$59.14, the largest ever recorded in btc history.
For context, the perpetual spot price gap represents the difference between a cryptocurrency's price in the spot market (where an asset is traded directly) and its perpetual futures price (contracts that speculate on the future value of an asset. asset without maturity).
A negative gap means that perpetual futures are trading at a lower price than the spot market, indicating bearish sentiment in the derivatives market. Therefore, the current highly negative and perpetual spot price gap of -$59.14 suggests that derivatives traders expect a short-term decline in the price of bitcoin.
However, Darkfost notes that perpetual spot price gaps are historically likely to reverse as markets stabilize. Therefore, extremely negative gaps like those currently occurring are often good buying opportunities, as markets tend to overreact during periods of increased uncertainty before recovery occurs.
btc Investors Post Profits of Over $5.72 Billion Amid Price Drop
In other news, cryptanalyst Ali Martinez <a target="_blank" href="https://x.com/ali_charts/status/1870545271496626622″ target=”_blank” rel=”noopener nofollow”>information that the bitcoin market witnessed over $5.72 billion in profits realized during the recent market crash. This indicates that a significant portion of bitcoin holders made profits before the price correction, triggering profit-taking.
While the large gains made may indicate cautious or bearish sentiment in the short term, they also suggest that bitcoin's previous price rally was substantial 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% in the last day. However, the asset's trading volume dropped by 50.28% and is valued at $54.23 billion.
Featured image from Economic Times, chart from Tradingview
