The ratio between bitcoin's daily trading volumes in spot and derivatives markets has reached an 11-month low, signaling renewed speculative activity in the crypto market. The decline comes amid a 70% year-to-date rise in bitcoin's price and indicates improved risk appetite in the crypto market and potential for price volatility. The slide has been quite sharp since bitcoin first ran into crucial resistance above $28,500 on March 21, with speculators piling into bitcoin at a faster rate relative to retail investors and long-term holders. The spot market is usually equated with long-term investors, while derivatives are considered a proxy for sophisticated traders and speculators who make risky leveraged bets to magnify returns.

(By Omkar Godbole)