The market is signaling that Bitcoin may be vulnerable to further volatility.
According to a recent Glassnode report, BTC saw strong realized profits of around $65k, while hot capital increased and sell-side pressure began to increase.
These signals suggest that Bitcoin’s move towards $70,000 may face further resistance before a breakout. Notably, other metrics on the chain show a similar trend.
As the chart below shows, 30-day spot demand for Bitcoin rebounded sharply to around -80K BTC in early July but has since weakened again to around -170K BTC.
This indicates that spot demand is losing momentum, while analysts warn that a lack of new purchases may increase the risk of a prolonged liquidation.
It is worth noting that given the situation of Bitcoin derivatives, this risk does not seem far-fetched.
According to CryptoQuant data, Bitcoin’s positive funding rates jumped more than 20% in less than 72 hours, showing that bullish positions and leverage are building up again. If spot demand remains weak, these crowded long positions could leave Bitcoin vulnerable to a sharp liquidation move.
This naturally reinforces Glassnode’s point that Bitcoin (BTC) It could enter a period of high volatility. However, if spot demand starts to recover, the narrative quickly turns to whether the bulls can flip this fake breakout setup into a breakout, trap the late bears, and push Bitcoin towards the $70,000 level.
Bitcoin whales continue to buy despite spot demand fading
The past 48 hours have felt like a textbook short squeeze.
According to CoinGlass data, Bitcoin is being shorted by liquidations He went up Over $80 million, representing 90%+ of total liquidations. The move coincided with BTC reclaiming $66,000, showing that the bears were getting squeezed as the price rose.
However, with no instant quotes, the rally can quickly turn into an illusion.
This is where on-chain data starts to tell a different story. As the chart below shows, Bitcoin whales have accumulated 66,700 BTC over the past 60 days, while average holders sold 77,800 BTC.
Technically, this accumulation occurred while Bitcoin corrected nearly 25% to around $58K. Rather than selling into weakness, whales continued to consolidate their positions, indicating strong conviction despite the broader risk-off environment.
Now, with spot demand fading, this accumulation is starting to resemble the classic shift from STH to LTH. Historically, this phase reflects the transition of supply into stronger hands and often precedes a more sustained uptrend.
This naturally puts the status of Bitcoin derivatives under the spotlight.
According to AMBCrypto, if this shift is already underway, the recent surge in long bets looks more like a strategic position than aggressive speculation.
Therefore, the setup would prefer to push Bitcoin towards $70,000 and squeeze late sell trades, rather than turn the current rally into a bull trap.
