Bitcoin’s Rally Shows Signs of Stability as Key Metrics Avoid Overheating

• Bitcoin rally continues without a spike in funding rates, avoiding past overheating patterns.
• Taker buy volume forms lower highs, signaling reduced conviction despite rising prices.
• Market buy volume trends downward, pointing to cautious but steady demand in the recovery.

According to new on-chain and market data from CryptoQuant, Bitcoin’s ongoing price recovery differs from previous rallies. Subdued funding rates, declining taker buy volume, and steady market participation point to a more stable, less speculative uptrend. This behavior stands in contrast to earlier phases, where rapid gains were followed by corrections due to excessive leverage and aggressive buying pressure.

In previous rally phases during 2023 and 2024, Bitcoin’s price increases were mirrored by a rise in Binance funding rates, an indicator of leverage in the derivatives market. Each spike in funding rate coincided with surging market buy volumes, followed by corrections that saw investor sentiment deteriorate.

The current phase shows a major absence of such spikes. Despite Bitcoin rebounding toward its all-time highs and reaching near $120,000, funding rates have remained low. This signals that traders are not engaging in the same level of leveraged speculation. The more restrained funding activity may be helping prevent the overheating that led to prolonged market pullbacks in the past.

Taker Buy Volume Trends Point to Lower Conviction

Taker buy volume on Binance, used to measure the intensity of market orders being filled at the ask price, offers additional insight into buyer behavior. In the three rally phases identified by CryptoQuant, taker volume has formed lower highs, creating a divergence between price action and buying strength.

While the price of Bitcoin has steadily climbed, the taker buy volume has not followed the same upward trajectory. Instead, it has shown a downward slope marked by lower peaks. This shows a decrease in aggressive buying activity and reflects a market gaining value without excessive demand pressure. The weakening in this metric signals a cautious market stance, despite the upward movement in price.

Market Buy Volume Drops During the Rebound

During Bitcoin bull runs, the amount traded on Binance usually goes up, often leading to the market becoming overheated and causing a correction. In past cycles, when stocks hit new all-time highs, there was a surge in buying followed by a short-term slide.

Nevertheless, the current trend differs from what we have seen before. After Bitcoin’s dip, the volume of people buying it has decreased. The rising market seems to be due to strong but sensible demand because the buying frenzy is not as big as it has been in the past.