Leveraged Futures in the Driver's Seat, Spot Market Stays Cautious
A recent in-depth report from an analyst at the on-chain analytics firm CryptoQuant sheds light on the fragile foundation of Bitcoin's latest price advance. The analysis concludes that the rally from around $66,000 to $72,000 was predominantly fueled by leveraged capital in the derivatives market, with conspicuously lacking support from genuine spot market buying from long-term holders or institutions.
Correction Phase Confirmed, Critical Support Levels in Focus
The report asserts that rallies built on such speculative, leverage-driven "hot money" are inherently unstable. The market has now officially entered a confirmed bearish correction phase. Given the current on-chain metrics and fund flows, a price retracement back to the initial launch zone of this move—the $66,000 to $68,000 range—is viewed as the most probable near-term scenario.
Cascading Liquidations Loom if Support Fails
A more severe warning is also issued: a decisive break below the crucial $66,000-$68,000 support band could open the gates for a deeper decline. The next significant area to watch would be the stronger support cluster between $60,000 and $63,000. Such a move could trigger a wave of forced liquidations for the highly leveraged long positions accumulated in the futures market, potentially creating a self-reinforcing downward spiral and amplifying market volatility.
- Core Risk: Rally lacks foundational spot demand, built on shaky ground.
- Near-Term Outlook: High probability of a pullback to the $66K-$68K origin zone.
- Downside Risk: A break below origin zone risks a test of $60K-$63K strong support.
- Potential Threat: High leverage poses risk of a cascading liquidation event.