The trading volume of crypto derivatives on the Binance exchange surged in July, reaching the highest level in six months, indicating increased trading activity and the potential for higher volatility due to recent market fluctuations.
Binance's futures trading reached a trading volume of $2.55 trillion in July, the highest level since January, as reported by CryptoQuant analyst J.A. Maartun on Tuesday.
He stated, "The rise in trading volume closely followed the sharp fluctuations in the prices of Bitcoin and other cryptocurrencies." At the end of last month, the total market value of cryptocurrencies reached a historic high of $4 trillion, but has since declined.
Other crypto derivatives providers such as Bybit and OKX also performed strongly, reaching trading volumes of $929 billion and $1.09 trillion, respectively. However, Binance remains far ahead, accounting for more than half of the total volume among all major exchanges.
"The increase in trading volume indicates that more users are becoming active again, possibly due to recent price breakthroughs," the analyst revealed.
Increased participation in the derivatives market
Binance, as the leader in the crypto derivatives market, offers 568 trading pairs with the highest liquidity and the most assets. Its current daily trading volume is $82 billion, reaching a four-month daily high of $134 billion on July 18.
The futures market also plays a key role in price discovery, as the increase in trading volume means more traders are expressing their views on future prices. Crypto futures are exchange-traded contracts that allow participants to speculate on the future price of assets like Bitcoin (BTC) or Ethereum (ETH) without actually holding the assets.
Open interest remains high
Meanwhile, Bitcoin futures open interest (OI, a measure of the total number or value of unsettled contracts) remains high at around $79 billion, but has decreased from the historical high of $88 billion set in mid-July.
When OI is too high, leverage liquidations often occur, which can lead to sharp declines in the spot market.
