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Is Bitcoin’s $100K Rally Just a Mirage? What On-Chain Data Reveals About Its True Strength
Bitcoin’s recent ascent above $100,000 has caught the eyes of many in the finance world, but the news suggests this rally might not be as robust as it appears. According to insights from Glassnode, the spike largely stems from leverage rather than new market entrants.
Speculative Bets Dominate the Scene
Data from late June indicates high activity in Bitcoin futures, suggesting that price movements were significantly influenced by speculative bets. As the rally’s excitement waned, both funding rates and the three-month futures basis dipped, signaling a drop in long-term bullish sentiment.
Spot Market Activity Lags Behind
Contrasting the futures market, the spot market remained relatively stagnant. During Bitcoin’s peak at $111,910 in May, the daily spot volume was recorded at $7.65 billion, significantly lower than previous highs of over $20 billion. This suggests that neither retail nor long-term holders were eager to increase their positions substantially during this period.
Institutional Interest Provides Some Support
Despite the lackluster enthusiasm in spot trading, institutional investors continued their acquisitions. Notable purchases by Michael Saylor’s Strategy, Metaplanet, and ProCap BTC amounted to approximately $1 billion in Bitcoin. Additionally, U.S.-listed Bitcoin ETFs added over $1.5 billion in new Bitcoin holdings, indicating sustained institutional interest.
Potential for a Supply Squeeze
Currently, only 7 million BTC are available on exchanges, with around 14 million BTC held in long-term storage. This tight supply scenario could potentially uphold prices if demand persists. However, it also poses a risk of sharp declines if these coins were to suddenly move.
Future Outlook: Cautious Optimism Amid Volatility
While the surge above $100,000 may seem promising, it largely reflects short-term trading strategies rather than a groundswell of new support. Any significant correction could follow if leveraged positions are rapidly unwound. Nevertheless, the continuous buying by large entities provides a cushion that might mitigate drastic price drops.
As of June 28, Bitcoin’s price stands at $106,500, marking a slight decrease. Market analysts now await a resurgence in spot market demand or stabilization in futures positions to confirm the strength of the ongoing trend. For those interested in further details on cryptocurrency markets, you can explore more at Binance.
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