Wintermute: BTC rally is an unstable short squeeze, not spot-driven

While Bitcoin's surge past $80,000 has raised market expectations, the rally was driven by a short squeeze rather than spot demand, making it unstable, according to an analysis by Wintermute. The firm noted that bull markets are typically confirmed by spot buying, but this recent rally was centered in the perpetual futures market. It pointed out that a large number of short positions were established as Bitcoin approached $70,000, with subsequent forced liquidations and short covering driving the price up. However, Wintermute also acknowledged positive long-term trends, such as ETF inflows and decreasing Bitcoin reserves on exchanges. The firm cautioned that the short-term momentum is fragile, and a price correction is possible if spot buying fails to materialize after the short squeeze concludes. Bitcoin could be tested if the U.S. Consumer Price Index (CPI) comes in higher than expected or if stock market volatility increases due to policy uncertainty. Conversely, if Bitcoin can maintain the $80,000 level amid macroeconomic headwinds, it would significantly boost confidence in the bull market. Wintermute added that with the Relative Strength Index (RSI) nearing overbought levels and spot trading volume declining, a period of consolidation is likely needed.