Bitcoin’s Q3 outlook uncertain – Is another liquidation event coming?

• Bitcoin is pulling again, however apparently, there aren’t any basic indicators of overheating.
• Will speculative positioning proceed to dominate the development?

As Q2 attracts to a detailed, Bitcoin [BTC] has posted a stable 30% quarterly return, marking a pointy acceleration from Q1’s 11.82% web loss.

Nonetheless, regardless of printing a brand new all-time excessive, BTC fell wanting replicating This autumn 2024’s explosive rally, when the asset practically doubled and locked in a 47.73% ROI. 

Certain, market FUD performed a key function. Nevertheless, a latest Glassnode report factors to a extra structural divergence — One with potential implications for the way Bitcoin’s future rallies unfold.

BTC pulls again as leverage overtakes spot demand

No query, the post-Liberation FUD in early April shook the market, dragging Bitcoin right down to $74,393, a multi-month low. However in hindsight, that transfer provided a major entry for strategic consumers.

BTC rallied practically 50% off that low, printing a brand new all-time excessive, however what stood out was the way during which it occurred.

There was no RSI blowout, no spike in retail-driven euphoria, and no indicators of basic overheating in spot markets. 

On the floor, this appeared like a structurally wholesome rally. However below the hood, Futures markets Open curiosity exploded to $81 billion, including practically $30 billion in below two months.

In consequence, each Bitcoin dip triggered a spike in lengthy liquidations, reinforcing a suggestions loop.

As an alternative of orderly retracements, the market delivered aggressive unwinds, pushed not by spot promoting however by extreme leverage getting flushed.

Supply: CryptoQuant

If this development persists, liquidation patterns might quickly resemble the late-January to early-April cycle, the place leverage resets dictated Bitcoin’s each draw back transfer. 

It’s additionally price noting that Q3 has traditionally underperformed, with Bitcoin posting minimal returns up to now three years.

Additionally add within the macro dangers, and immediately, that Futures-to-Spot Quantity ratio turns into a vital lens.

Can Bitcoin lead when quantity refuses to observe?

Glassnode data sheds mild on why Bitcoin’s rally to $111k didn’t exhibit typical indicators of market overheating. 

Regardless of the brand new all-time excessive, spot quantity remained muted at $7.7 billion, considerably under the peaks noticed in prior bull cycles.

Supply: Glassnode

In the meantime, Futures volume stored climbing, pointing to a rally pushed not by broad spot participation, however by speculative capital rotating by way of derivatives markets.

This structural imbalance reinforces AMBCrypto’s thesis: Leverage continues to drive Bitcoin’s value discovery this cycle, outpacing sustained retail demand.

That makes Bitcoin’s early Q3 really feel much more fragile. And if merchants maintain piling into leverage, one other Q1-style flush isn’t off the desk.