Bitcoin Price Rally Supported by Spot Buying, Not Borrowed Money

The Bitcoin price has reached multi-month highs due to spot buying and short covering, not borrowed money. This gives the rally a longer runway than a typical squeeze, according to analysts at Bitfinex.

The coins now in profit could still trigger this year's largest wave of profit-taking. Since August 21, Bitcoin has been above its multi-month high of $79,491, leaving every buyer from the past five months sitting on a paper gain.

Bitcoin buyers who purchased their coins between March and August are currently sitting on a profit above $68,000. This is a key level that Bitfinex analysts have flagged as the most important line on the chart.

The absence of heavy selling and increased demand from Bitcoin ETFs has given this rally a longer runway. On August 20, U.S. spot Bitcoin ETFs pulled in $606.29 million, their largest single day since May 1.