Analysts warn that the BTC rally is driven by leverage, not fresh capital inflow.

According to a post by CryptoQuant analyst Sunny Mom, Bitcoin rose from approximately $64,000 to $66,000 over two days, but this rally was primarily driven by leveraged trading rather than genuine capital inflows. On-chain data shows that a brief negative funding rate between July 18–19 triggered a short squeeze, sparking the rebound; subsequently, open interest climbed from around $21.2 billion to a new high of $23 billion, indicating that new leveraged positions continued to fuel the price movement. Meanwhile, spot trading volume has remained in a "cooling" state since April, with OTC stablecoin funds observing rather than withdrawing. Regarding ETFs, U.S. spot Bitcoin ETFs recorded net inflows for two consecutive weeks, with approximately $271 million flowing in on July 20 alone (of which IBIT contributed $1.165 billion), signaling a slow return of institutional capital—though still insufficient to revive overall spot trading volume. Analysts warn that the current rally structure is fragile; should momentum fade, rapid liquidation of leveraged positions could trigger a sharp correction. They recommend waiting for a genuine rebound in spot trading volume before chasing further gains.