Bitcoin prices are dropping but there are no clear signs of overheating.
Will speculative sentiment continue to dominate the trend?
As Q2 ended, Bitcoin (BTC) recorded a quarterly growth of 30%, showing a strong recovery from an 11.82% decline in Q1. Despite setting a new all-time high, BTC has not recreated the frenzy like in Q4 2024, when the price nearly doubled, yielding a return of 47.73%. Although negative information from the market played a significant role, reports from Glassnode indicate a structural divergence, which could affect future recoveries of Bitcoin.
Bitcoin prices are declining due to leverage exceeding spot demand.
Clearly, the negative information from early April put pressure on the market, bringing Bitcoin's price down to a multi-month low of $74,393. However, this adjustment opened up opportunities for strategic investors. Bitcoin has recovered nearly 50% from that low, reaching a new all-time high, but it is noteworthy how this recovery has occurred.
There are no signs of a surge in RSI, nor is there a frenzy from retail investors or overheating signs in the spot market. On the surface, this appears to be a structurally healthy recovery. However, the futures market has recorded open interest up to $81 billion, adding nearly $30 billion in less than two months. As a result, every price drop of Bitcoin triggers a wave of long contract liquidations, creating a negative feedback loop.
Instead of a gradual correction, the market has witnessed strong sell-offs, not due to selling in the spot market, but because of excessive leverage being unwound. If this trend continues, the liquidation pattern may soon resemble the cycle from late January to early April, when Bitcoin's price drops were dominated by leverage resets.
It is also worth noting that Q3 often struggles to generate profits, with Bitcoin only recording low increases over the past three years. Additionally, current macro risks make the futures-to-spot volume ratio an important analytical factor.
Can Bitcoin lead when trading volumes do not increase?
Data from Glassnode shows why Bitcoin's rise to $111,000 does not exhibit typical overheating signs. Despite setting a new all-time high, total spot volume only reached $7.7 billion, much lower than the peaks in previous bull cycles. In contrast, futures trading volume continues to rise, indicating that this recovery is not supported by widespread participation from the spot market but primarily driven by speculative capital shifting through derivative markets.
This imbalance reinforces the view that leverage continues to dominate Bitcoin's pricing process in the current cycle, far exceeding retail investor demand. This makes the outlook for early March more fragile. If traders continue to heavily invest in leverage, a decline similar to Q1 is not impossible.
Source: https://tintucbitcoin.com/bitcoin-q3-du-doan-va-thanh-ly/
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