The U.S. Federal Reserve’s public consideration of interest rate cuts in 2025 has had numerous negative impacts on financial markets. In addition to the 17% loss in Bitcoin’s price, data from the Binance exchange shows that the BTC market has currently reached its largest sustained price gap.
Bitcoin Spot-Perpetual Gap Drops to -$59 – What’s Next?
Last week, the Fed announced a potential reduction of its originally planned four rate cuts in 2025 to two, triggering a broad-based sell-off in global financial markets. As the total cryptocurrency market capitalization fell by 17.4%, the stock market lost more than $1.8 trillion in a single day as investors looked to shed risky assets from their portfolios, marking the worst daily decline since March 2020.
For the Bitcoin market, CryptoQuant analyst Darkfost reports a noticeable raise in selling pressure from the derivatives market, resulting in a persistent price differential in the spot and perpetual markets of -$59.14, the largest in BTC history.
For context, the spot-perpetual price gap represents the difference between the price of a cryptocurrency on the spot market (where assets are directly traded) and its perpetual futures price (contracts that speculate on the future value of an asset without expiration).
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 spot-perpetual price spread of -$59.14 suggests that derivatives traders expect a near-term decline in the price of Bitcoin.
However, Darkfost notes that historically, momentary and persistent price gaps are likely to reverse as markets stabilize. Therefore, extremely negative gaps like the one currently on display often represent a good buying opportunity, as markets tend to overreact during periods of increased uncertainty before a recovery occurs.
BTC investors see over $5.72 billion in profits as prices fall
In other news, crypto analyst Ali Martinez reports that over $5.72 billion in profits were realized during the recent Bitcoin market crash. This means that a significant portion of Bitcoin holders made a profit before the price correction resulted in profit-taking.
While immense realized gains may signal cautious or bearish sentiment in the compact term, they also suggest that Bitcoin’s prior price rally was significant enough to benefit many investors who believe in a mighty bullish structure that is sustainable in the long term.
At the time of writing, Bitcoin is trading at $97,182, up 0.83% over the past 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
