Binance Short Squeeze Triggers Bitcoin Rally, Analyst Warns of Pullback Risk

Bitcoin has seen a significant surge in value over the past week, rising by 23.8%. Analyst BorisD points to short liquidations on Binance futures as the main driver behind this rally.

The Bitcoin price reached $77,754 at the time of writing, with derivatives-driven buying showing signs of losing momentum. According to BorisD, the advance has not been led by spot buying, which raises concerns about a potential pullback if spot demand does not strengthen as forced buying subsides.

Binance's Short Squeeze indicator reached its highest reading since November 2024 at 6.94, indicating significant pressure in derivatives markets. BorisD notes that short sellers closing their positions generated forced purchases that propelled Bitcoin higher, but the next phase of the move depends on whether spot-market buyers can sustain demand once liquidation-driven momentum fades.