TLDR:
- Bitcoin rallies in 2021 were tied to strong spot volume growth, pushing the price from $30K to over $65K.
- In 2022, derivatives stayed dominant while weakening spot volume saw Bitcoin drop from $40K to nearly $20K.
- Analysts warn that without sustained spot demand, Bitcoin may keep trading sideways under pressure from derivatives.
- Current data shows derivatives make up about 75% of total trading, while ETFs account for just 2.5%.
Bitcoin traders are debating whether spot or derivative markets hold the key to the next price breakout. Past bull runs often began with strong spot demand, but current trading is dominated by leveraged derivatives.
That imbalance raises doubts about whether the market can sustain a rally. Analysts are pointing to weak spot activity as a barrier for bullish momentum. Unless spot volumes surge, Bitcoin could remain trapped in sideways action.
Spot Volume vs. Derivative Trading in Bitcoin Price
CryptoQuant analyst PelinayPA shared a chart comparing BTC’s price with spot and derivative exchange volumes. The data showed that during the 2021 rally, spot surges aligned with price gains while derivatives stayed active.
Can Spot vs. Derivative Volume Signal the Next Big Move?
“Historically, major rallies followed strong spot volume growth. Today, speculative leveraged trading drives the market more than genuine spot demand. For a sustainable bull signal, we need consecutive surges in spot… pic.twitter.com/iGmAMQvyIS
— CryptoQuant.com (@cryptoquant_com) September 3, 2025
From July to November of that year, Bitcoin climbed from $30,000 to above $65,000 as both sides of the market strengthened.
By contrast, in early 2022, derivatives continued to dominate, but spot interest weakened. That imbalance coincided with Bitcoin’s fall from $40,000 to $20,000. CryptoQuant noted that rallies have historically needed strong and persistent spot activity, which is not present now.
The summer of 2022 brought brief spikes in spot demand, but they quickly faded. Bitcoin consolidated around $20,000 without gaining upward momentum. According to the analysis, current spot trading levels show little resemblance to the conditions at the start of earlier bull markets.
The platform suggested that for a sustainable rally, consecutive increases in spot volume must appear. Without them, derivatives may keep pressuring the market toward consolidation or further decline.
Derivatives Market Sentiment and Price Outlook
Trader Darkfost commented that derivatives still make up about 75% of trading, with ETFs holding only 2.5%. He pointed out that this makes sentiment tracking in derivatives essential, since they represent the majority of volume.
He noted that recent data shows a positive shift in derivatives sentiment over the past two days. Metrics such as funding rates, open interest, and taker volume all turned upward while Bitcoin’s price stayed flat. The Coinbase Prime Index also showed strength, indicating institutional flows leaning positive.
📈 The derivatives market is turning positive again.
I really like this chart to gauge the prevailing sentiment within the derivatives market.
• Why does it matter ?
Because today, derivatives represent the largest share of trading volumes. I checked a few days ago and, if… pic.twitter.com/GPlI9cl7hR
— Darkfost (@Darkfost_Coc) September 3, 2025
However, Darkfost cautioned that heavy leverage combined with overly bullish sentiment can lead to rapid reversals. Traders often face sharp corrections when speculative positions dominate without underlying spot demand.
Together, both CryptoQuant and Darkfost suggest that without a return of consistent spot buying, any upside may be short-lived. Bitcoin’s next breakout depends not only on derivatives enthusiasm but also on real demand in the spot market.
