Crypto Derivatives Binance Exchange's trading volume surged to a six-month high in July, showing increased trading activity and potentially volatility following recent market fluctuations.
Binance futures trading volume reached $2.55 trillion in July, the highest level since January, crypto analyst Ja Maartun reported Tuesday.
“The volume jump followed a month's rapid price movement for both Bitcoin and altcoin,” he said.
Other crypto derivatives providers Bybit and OKX were also strong at a volume of $92.9 billion and $1.09 trillion, but Binance accounted for more than half of the total on all major exchanges, remaining the largest with a significant margin.
“The increase in trading suggests that more users are re-active, probably due to recent price breakouts,” analysts said.
Binance futures volume reaches a massive high. Source: Cryptoquant
Participation in the higher derivatives market
Binance is a market leader in crypto derivatives with the highest liquidity and most assets, offering 568 pairs. According to Coingecko, the current daily trading volume was $82 billion, reaching a four-month high of $134 billion a day on July 18th.
Related: The $100 million Binance Futures Volume supports trader's “Altseason” claims
Higher futures volumes indicate more derivative traders and institutions are actively participating in the market, which is often correlated with periods of significant price transfers or market uncertainty.
Futures markets also play an important role in price discovery. This is because as volume increases, more traders are expressing their opinions about future prices. Crypto futures are exchange contracts that allow you to infer the future prices of assets such as Bitcoin (BTC) and ether (ETH) without actually owning the assets.
Open interest remains high
Meanwhile, total Bitcoin futures oi (a measure of the total number or value of open contracts that have not yet been resolved) remains at around $79 billion. However, according to Coinglas, it fell from a record high of $88 billion in mid-July.
Too high OI can often lead to a continuous stream of leverage flashouts, which can cause a sharp drop in the spot market.
Bitcoin futures oi oi remains maintained. sauce: Coinglass
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