Bitcoin rally lacks leverage and spot demand support

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Bitcoin rally lacks support

Highlights

Bitcoin futures open interest remains unchanged at $53.40 billion and spot ETF inflows only reach $74 million, indicating muted leverage and spot demand amid rising prices.
Crypto futures short liquidations total $450 million in 24 hours, with $300 million in bitcoin, suggesting the rally is primarily driven by unwinding bearish positions.
Analysts from Marex and Giottus warn that sustained upside depends on stronger spot flows and caution investors to monitor ETF flows and U.S. labor-market data before increasing exposure.

Market rebound shows limited conviction

As reported by CoinDesk, bitcoin and the wider crypto market surge and retain gains after the initial knee-jerk drop in early Asian trading on Wednesday following reports of a Democratic sweep in the midterm elections.

Even so, two core indicators remain weak. Bitcoin futures open interest stands largely unchanged at $53.40 billion, according to Coinglass, while open interest in other tokens including SOL, HYPE, DOGE and NEAR is flat or lower despite rising prices.

That pattern suggests fresh leverage is not entering the market in force. Instead of new capital chasing the rally, price gains appear to be advancing without a broader build-up in directional risk-taking.

Spot demand indicators also remain subdued. U.S.-listed spot ETFs draw in just $74 million on Wednesday, after outflows of more than $400 million in the first two trading days and more than $500 million last month, according to SoSoValue.

The Coinbase Premium indicator, which traders use to gauge relative demand from U.S.-based investors, also stays negative. In past sustained uptrends, that measure typically turns positive.

Short covering drives gains as analysts await confirmation

Taken together, derivatives and spot market signals indicate the latest move higher is driven largely by the unwinding of bearish positions. In the past 24 hours, crypto futures short liquidations reach $450 million, including $300 million tied to bitcoin alone, the highest level since Sept. 21.

Analysts at Marex say the next phase of the advance depends on stronger cash-market participation. In an email, they say bitcoin reclaims $80,000 as lower yields, a weaker dollar and cheaper oil revive appetite for risk, but add that spot flows and a cleaner derivatives structure now need to support any further upside.

India-based FIU-registered Giottus also characterizes the move as a relief rally rather than a confirmed uptrend. Chief executive Vikram Subburaj says investors should avoid chasing sharp moves, use staggered entries, keep position sizes modest and monitor ETF flows and upcoming U.S. labor-market data before increasing exposure.

In our earlier article, we examined how Wall Street was nearing a key test with the S&P 500 hovering close to 8,000 after a midsummer rally led by AI-linked megacaps. We noted that investors were weighing whether strong third-quarter earnings could offset headwinds from higher oil prices, elevated Treasury yields, and added uncertainty ahead of the U.S. midterm elections.

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