joaowedson2024-01-10

Binance Leans Towards Short Positions While Bybit Favors Long Positions: An Analysis of CVD in the Cryptocurrency Market

The Cumulative Volume Delta (CVD) is a potent indicator that accumulates over time the difference between buying and selling volumes. This is particularly relevant in the cryptocurrency derivatives market, where a significant volume is concentrated. A detailed analysis of the CVD, segmented by exchange, reveals striking differences. For instance, Binance tends to favor short positions, while Bybit shows a preference for long positions. These variations reflect the diverse strategies adopted by each exchange and are influenced by the profiles of traders active on these platforms. Interestingly, although the CVD indicator for Binance shows a downward trend, its fluctuations have a stronger correlation with price changes. This can be attributed to Binance having the highest trading volume among all exchanges. A crucial aspect to note is that, typically, when both the price and CVD are rising, as seen with Bybit, it may indicate that many positions are still open. This scenario suggests a potential for increased volatility and forced liquidations.