The market is signaling that Bitcoin could be vulnerable to more volatility.
According to a recent Glassnode report, $BTC saw strong realized profit-taking around $65k, while hot capital increased and sell-side pressure started building.
These signals suggest Bitcoin’s move toward $70k could face more resistance before a breakout. Notably, other on-chain metrics are showing a similar trend.
As the chart below shows, Bitcoin’s 30-day Spot demand recovered sharply to around -80k $BTC in early July but has since weakened again to nearly -170k $BTC.
This shows that Spot demand is losing momentum, while analysts are warning that a lack of fresh buying could increase the risk of a long liquidation event.
Notably, looking at Bitcoin’s derivatives positioning, this risk doesn’t seem far-fetched.
According to CryptoQuant data, $BTC’s positive funding rates have jumped over 20% in less than 72 hours, showing that bullish positioning and leverage are building up again. If Spot demand remains weak, this crowded long positioning could leave Bitcoin vulnerable to a sharp liquidation move.
This naturally reinforces Glassnode’s view that Bitcoin [$BTC] could be entering a period of higher volatility. However, if Spot demand starts to recover, the narrative quickly shifts to whether bulls can flip this fakeout setup into a breakout, trap late bears, and push $BTC toward the $70k level.
Bitcoin whales keep buying despite fading Spot demand
The past 48 hours have looked like a textbook short squeeze.
According to CoinGlass data, Bitcoin short liquidations climbed above $80 million, accounting for 90%+ of total liquidations. The move coincided with $BTC reclaiming $66k, showing that bears were squeezed out as the price pushed higher.
However, with Spot bids lacking, the rally could quickly turn into a fakeout.
This is where the on-chain data starts telling a different story. As the chart below shows, Bitcoin whales accumulated 66,700 $BTC over the past 60 days, while mid-sized holders sold 77,800 $BTC.
From a technical perspective, this accumulation took place while Bitcoin corrected nearly 25% to around $58k. Instead of selling into weakness, whales continued adding to their positions, signaling strong conviction despite the broader risk-off environment.
Now, with Spot demand fading, this accumulation is starting to resemble a classic STH-to-LTH transition. Historically, this phase reflects supply moving into stronger hands and has often preceded a more sustainable bullish trend.
That naturally puts Bitcoin’s derivatives positioning under the spotlight.
According to AMBCrypto, if this transition is indeed underway, the recent rise in long bets looks more like strategic positioning than aggressive speculation.
The setup therefore favors Bitcoin pushing toward $70k and squeezing late shorts, rather than the current rally turning into a bull trap.
Final Summary
- Weak Spot demand is keeping Bitcoin at risk, but stronger buying could fuel a move toward $70k.
- Whales continue buying $BTC, signaling a potential breakout instead of a bull trap.
