Binance's Market Dominance Continues to Rise Despite Uncertainty in the Crypto Market

While the crypto market has experienced a sustained period of uncertainty, Binance's market dominance has continued to rise.

Binance’s spot volume has surpassed all other exchanges combined and is currently 8x larger than Coinbase, highlighting its superiority in market share.

According to the latest data from CryptoQuant, Binance’s trading volume has outperformed that of all other exchanges.

This emphasizes the exchange’s significant influence on liquidity and market dynamics. For instance, in January 2024, as Binance’s volume surged past its competitors, Bitcoin’s price skyrocketed from $42,000 to $73,000 within weeks.

Simultaneously, Binance’s native coin, BNB, experienced remarkable growth, rising from $335 to $645 during the same period.

Typically, Binance’s strong performance in spot trading volume has signaled a bullish market trend in the weeks that followed.

The Binance vs. Other Exchanges BTC Spot Volume Delta indicator is once again positive, suggesting a potential bullish outlook in the coming months, despite a decline in overall aggregated spot trading volume.

However, despite the rising dominance, the market is yet to turn bullish for Binance Coin [BNB]. In fact, BNB investors, both large entities and retail, appear bearish.

This is evident from the recent sale of 10,850 BNB tokens, valued at $6.51 million, by Gnomelabs.

According to onchain data from DeFi analytics firm Glassnode, the firm has deposited a total of 76.37 million USDC into Binance and Bybit.

When such a large holder turns to selling, it indicates a lack of market confidence, reflecting bearish sentiments.

Further, a glance at the futures basis reveals strong bearishness. When the futures basis turns negative, it implies that the future price is lower than the spot price.

Such a market setup suggests that traders expect lower prices in the future, reflecting strong bearish sentiment.

With futures entering negative territory, BNB’s Aggregated Funding Rate has also turned negative, indicating bearish sentiment in the futures market.

Over the past week, the Funding Rate has consistently remained in negative territory, suggesting an increasing number of traders are taking short positions. As a result, shorts are paying longs, reflecting expectations of further price declines.

Although Binance’s dominance continues to rise, BNB has not mirrored these gains in the short term. Consequently, Binance Coin remains bearish, and current market conditions point to a potential further correction before any upward movement.

If this sentiment persists, BNB is likely to drop below $600, potentially reaching $576.

However, if the past is any indicator, a repeat of the previous cycle—where Binance’s dominance surged—could drive a recovery towards $618, strengthening the altcoin for a possible rally to $638.