Binance Short Squeeze Drives Bitcoin Rally, Analyst Warns of Potential Rebound

CryptoQuant analyst BorisD has pointed out that Bitcoin's recent rally may be due to a Binance short squeeze rather than genuine spot demand. The Short Squeeze indicator on Binance climbed to its highest level since November 2024, at 6.94, indicating a sharp increase in forced buying due to liquidation.

This is different from organic spot accumulation, which creates a more durable floor for the market. Once the forced buying exhausts itself, price becomes vulnerable to a retrace if organic buyers do not step in.

The indicator suggests that the rally was driven by a short liquidation cascade, which can temporarily overwhelm order books and create aggressive upside. However, this kind of flow can vanish quickly, making it essential for spot demand to take over from derivatives.