Bitcoin – Identifying the risks to BTC’s leverage-driven price rally

Currently, leverage has been quietly reasserting itself as the primary driver of Bitcoin’s [BTC] momentum. In reality, the latest breakout triggered an aggressive brief squeeze, forcing merchants to unwind bearish positions at scale.

In accordance with Glassnode , this was the biggest short-liquidation occasion throughout the highest 500 cryptocurrencies since 10 October 2025.

On the charts, liquidation spikes aligned tightly with Bitcoin’s push to its native highs.

Supply: Glassnode

Merchants worn out tens of millions in brief publicity inside a short while window, and compelled buybacks chased Bitcoin’s value increased and bolstered upside strain. This conduct has been constructing since late 2025, however the depth accelerated as Bitcoin held elevated ranges as a substitute of retracing.

If present liquidations proceed, Bitcoin may climb in the direction of the $100,000-$105,000 zone backed by momentum alone.

Nevertheless, if funding cools and Open Curiosity resets, the value might consolidate. Previous squeezes have proven that sustainability typically is determined by spot demand changing leverage.

OG provide pullback indicators shift in market management

That’s not all although. OG Bitcoin Holders are not distributing on the tempo seen beforehand on this cycle. STXO information from cash dormant for over 5 years revealed a transparent slowdown in long-term holder spending.

Data from CryptoQuant confirmed that OGs had been extremely energetic into 2024, utilizing institutional demand and authorities shopping for as splendid exit liquidity.

Nevertheless, that conduct has since shifted. Earlier within the cycle, OG spending peaked close to 3,800 BTC. It then cooled to three,200 BTC, adopted by 2,200 BTC.

Supply: X

Within the brief time period, lighter OG promoting reduces overhead provide and helps value stability. Quite the opposite, in the long run, this conduct indicators conviction.

Traditionally, OG restraint aligns with accumulation phases reasonably than late-cycle distribution.

Whales hedge as retail commits – Who breaks first?

The chart revealed a transparent divergence. First, whales unwind lengthy publicity. Then, they rotate into shorts. This shift seemed to be deliberate.

Often, when the value sits close to elevated ranges, momentum fades. On the identical time, leverage quietly rebuilds. Because of this, the chance skews to the draw back.

On this specific case, the whales reacted early as a result of they noticed crowded positioning and late-cycle conduct. Furthermore, OG Bitcoin holders are not distributing aggressively.

This has remoted natural promote strain, whereas leaving leverage as the primary driver of the market. 

Supply: X

Retail merchants transfer the opposite method. They chase upside. They reply to cost, not construction. Consequently, they add longs as volatility expands.

For instance – On-chain information from Alphractal confirmed whales closing longs and flipping shorts as Bitcoin approached $69,000. Retail merchants did the alternative and added leveraged longs. Shortly after, Bitcoin corrected by practically 20%, falling from $69,000 to $56,000 earlier than stabilizing.

Such a setup implies a possible shakeout or cooling section. If leverage unwinds, the value will doubtless retrace earlier than any sustainable continuation.

All in all, Bitcoin’s construction is evident. Leverage, not spot demand, could also be driving momentum. Quick liquidations lifted the value, whereas OG promoting slowed and whales turned defensive. This has not solely tightened provide, however raised fragility too.

Due to this fact, the upside will stays weak. Sustainable positive aspects require spot demand to switch leverage.

With out the identical, there might be volatility danger, leaving any additional extension weak to a corrective reset.

Closing Ideas

• Leverage now drives Bitcoin’s momentum, with brief liquidations lifting the value whereas spot demand has grow to be secondary.
• Sensible cash could also be turning cautious, as whales hedge and OG holders sluggish promoting.