Bitcoin recorded a 23% gain over the past week, reaching the $77,535 level. However, behind this double-digit figure, there is a different pattern from typical crypto rallies that often end in cascading crashes.
Analysts at Bitfinex highlighted the comparison between price movements and activity in the derivatives market. When Bitcoin began breaking out and surged 10% to 11% in the initial phase, the total value of outstanding derivative contracts, or open interest, only grew by 4%. This wide gap between the price jump and the lack of new contracts signals clearly that the market movement is not supported by debt or leverage.
The price increase was purely driven by actual buying in the spot market. In addition, there was a boost from short covering, a condition where traders betting on price drops were forced to buy back the asset to close their positions and limit their losses. Since the market is not crowded with traders using borrowed funds, the threat of mass liquidation - the phenomenon of sudden price drops falling like dominoes that typically plagues over-leveraged markets - is significantly lower.
Institutional Capital Enters Directly
Signs of this spot buying are increasingly evident in the United States market. From Monday to Thursday, US stock exchange Bitcoin ETFs pulled in $1.6 billion in inflows. This billion-dollar capital flow over four days is strong evidence that institutional investors in the country are directly absorbing the asset, rather than merely speculating through derivative instruments.
To gauge how long these inflows can last, analysts suggest market participants monitor the Coinbase Premium indicator. This indicator tracks the price difference of Bitcoin on the Coinbase exchange compared to offshore exchanges. A positive premium indicates that local demand from the US region remains stronger than in other regions.
Where is the Strongest Defense?
Although the foundation of this rally appears solid, the market still needs a lower support level to anticipate profit-taking. Bitfinex flags the price zone between $68,000 and $69,000 as the most crucial support area at present.
This price range carries a dual psychological and technical weight. It represents the average purchase price of short-term holders, or the short-term holder cost basis. At the same time, this level coincides exactly with the 200-day Moving Average, the average price trend line often used to separate long-term uptrends and downtrends.
As long as spot buyers continue to defend this critical area, Bitcoin has a firmer footing compared to a speculative rally. For traders, the absence of a skyrocketing leverage ratio means price corrections are likely to proceed normally, without being followed by panic forced liquidations from exchange engines. As reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
