Analysis firm CryptoQuant takes the opposite view. Founder Ki Young-Ju said in an X post that bitcoin’s push above $79,000 was driven primarily by a short squeeze in the derivatives market rather than sustained spot demand, and that large-scale short covering leaves the market vulnerable to a reversal once the squeeze exhausts.

Funding rates on perpetual futures across major exchanges remain negative on a 7-day basis at -0.13% per Coinglass, meaning shorts are still paying longs to hold positions, the pattern that historically precedes both squeezes and the unwinding of squeezes.

The two views are not mutually exclusive. Spot demand from retail and institutions can be returning at the same time that the rally toward $79,000 was front-loaded by short covering. The test is whether the next attempt at the level brings fresh spot bids or runs out of shorts to squeeze.

Corporate accumulation continues regardless. Strategy bought $3.9 billion of bitcoin in April per Bloomberg, the firm’s largest monthly accumulation in a year.

Japanese company Metaplanet announced a $50 million bond issuance Tuesday to finance new bitcoin purchases, the latest in a series of yen-denominated debt deals the firm has used to build one of the largest corporate bitcoin treasuries outside the US.

The week’s catalysts arrive Wednesday and Thursday.

The Federal Reserve announces its policy decision Wednesday with traders pricing higher odds of a rate cut after the Justice Department closed its probe into Fed Chair Jerome Powell.

Megacap tech earnings from Alphabet, Microsoft, Amazon, and Meta on Wednesday and Apple on Thursday represent roughly a quarter of the S&P 500’s market capitalization.

Either the Fed or a strong earnings beat could provide the catalyst needed to push bitcoin through $80,000. Without one, the third rejection from the level starts to define the upper end of the range rather than precede a breakout.

More For You

Bitcoin Logo

Enflux points to oil-driven inflation as the main constraint, while questions around AI demand could reshape miner selling in the months ahead.

What to know:

  • Bitcoin is trading about 3% lower near $77,000 as investors hold back ahead of a pivotal week of U.S. economic data and a Federal Reserve rate decision.
  • Elevated oil prices above $100 a barrel are complicating the inflation outlook, diminishing prospects for near-term Fed rate cuts and keeping bitcoin stuck…

About the Author

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Stories