BTC Bitcoin spot price has surged from around 64K to 66K in the past two days, prompting many to ask: is this wave driven by genuine capital inflows, or another rally fueled by leverage? Combining several on-chain and exchange indicators, the answer is not difficult to piece together.
Short Squeeze Ignites, but Leverage Keeps Adding
Funding rates turned negative around 7/18-19, indicating bearish sentiment at the time, which triggered the initial rebound through a short squeeze. Interestingly, the rally did not stop after the squeeze—open interest (OI) climbed in tandem from about 21.2B to a new high of 23B, moving almost in sync with the price. This suggests the short squeeze was merely the fuse, while the sustained upward momentum is supported by continuously incoming new leveraged positions rather than a one-time short covering event. Although funding rates have also risen, they remain in a moderate range and have not yet reached overheated or crowded levels.