Bitcoin Rally Fueled by Binance Short Squeeze, Not Spot Demand

A recent surge in Bitcoin's price has been attributed to a short squeeze on Binance, rather than a genuine increase in spot demand. According to CryptoQuant analyst BorisD, the indicator that measures short squeezes reached its highest level since November 2024 at 6.94.

This means that the rapid move higher in Bitcoin's price is largely due to forced liquidation of short positions, rather than a genuine increase in buying activity. This type of flow can be temporary and does not create a durable floor for the market.

BorisD warns that the danger lies in the fact that forced liquidation buys are price-insensitive and can vanish quickly. He emphasizes that spot demand is still thin and that organic buyers need to step in to support the rally.