Derivatives-Driven Bitcoin Rally Faces Liquidation Risk

Bitcoin's recent price surge is largely driven by derivatives trading, but this momentum lacks support from spot demand, according to ScenarioX. This situation poses a significant risk of large-scale long liquidations.

CryptoQuant data suggests that Bitcoin's upward movement is being fueled by derivatives trading in the absence of buying pressure from actual spot market participants. This lack of spot demand support means that any downward correction could lead to substantial losses for those holding long positions.