Bitcoin rally may slow as short squeeze fades, QCP Capital says

Bitcoin’s recent surge was driven more by a chain of short liquidations in the perpetual futures market than by fresh capital entering the market, and the rally could become vulnerable once that short-covering pressure fades, according to crypto trading firm QCP Capital. QCP Capital said BTC open interest in the futures market has continued to decline even as the price rises, suggesting liquidated short positions have been driving the move higher. The firm added that a recent sharp increase in ETF inflows indicates spot demand is now following. That combination may support prices in the short term, QCP Capital said, but the rally could lose momentum once the short-covering pressure disappears. While the broader directional outlook remains positive, the firm said caution is warranted on momentum-chasing buys.