Binance Futures Fuel Bitcoin Rally, But Spot Demand Remains Elusive
The recent rally in Bitcoin's price may be driven more by short squeezes and derivatives markets rather than genuine spot demand, according to CryptoQuant analyst BorisD.
The Short Squeeze indicator on Binance has reached its highest level since November 2024 at 6.94, indicating a market where short positions are being forcefully closed and generating buy orders that push the price higher.
BorisD warns that this kind of flow can be price-insensitive and vanish quickly, making it vulnerable to a retrace if organic buyers do not step in.
The indicator suggests that liquidation events on Binance Futures have spilled over to other exchanges, forcing traders to buy back exposure and temporarily overwhelming order books.
For the rally to hold, spot volume needs to take over from derivatives markets, with on-chain flows, exchange inflows, and institutional spot buying becoming more relevant than liquidation data itself.