Odaily Planet News: On-chain data and derivatives data indicate that the recent rise in Bitcoin's price is primarily driven by spot demand, while short squeeze risks are increasing. Bitcoin has risen approximately 10% year-to-date, with the price remaining below $97,000. This increase is mainly driven by spot purchases rather than leveraged positions established through futures. Price increases driven by spot demand are typically healthier than those driven by leverage. The recent price movement from $90,000 to $97,000 has shifted over the past week from a leverage-driven rally to one supported by spot buying. Additionally, according to Glassnode data, the open interest in Bitcoin futures, measured in Bitcoin, stands at 678,000 BTC, which is roughly equivalent to the 679,000 BTC recorded on January 8, indicating that overall leverage in the system has remained largely stable. The perpetual futures funding rate is currently negative. (CoinDesk)
Bitcoin's Recent Rally Driven by Spot Demand, Short-Squeeze Risk Rises
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Summary
Bitcoin's recent price surge is driven by demand in the spot market, with spot grid trading strategies gaining popularity among traders. On-chain data indicates that the price has increased approximately 10% year-to-date, remaining below $97,000. This movement is primarily fueled by spot buying rather than futures trading. According to Glassnode, Bitcoin futures open interest stands at 678,000 BTC, showing little change since January 8, 2026. Negative perpetual futures funding rates suggest potential short-squeeze risks. Event-driven trading strategies are being closely monitored as market volatility remains elevated.
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