BTC rebound not a trend reversal due to weak demand, says analyst

Although Bitcoin's rebound yesterday has sparked market optimism, an analysis suggests it is too early to call it a complete trend reversal. In a contribution to CryptoQuant, crypto analyst firm XWIN Research Japan noted that Bitcoin's open interest (OI) has significantly decreased from its previous high, falling in tandem with the price during the recent downturn. This indicates the decline was likely caused more by liquidations and the clearing of futures positions than by spot selling. "While this process can stabilize the market, it does not mean new demand has recovered," the firm stated. The analysis points out that the fund inflow ratio to Binance is still low at 0.012. While this suggests selling pressure is limited, it does not signify strong accumulation. "It is difficult to say that structural demand has recovered," the firm added. In the current low-leverage environment, a price rebound can easily trigger a short squeeze, but the resulting price increase is due to the liquidation of short positions rather than an expansion of demand. The analysis concluded that a shift to a market uptrend requires sustained capital inflows and a recovery in demand.