Wintermute: Bitcoin's rally is fragile amid weak spot demand and may face a reversal in the short term

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Mars Finance News, according to Cryptopolitan, reports that Wintermute’s market report indicates that Bitcoin breaking above $80,000 was mainly driven by short squeeze in the perpetual futures market, rather than spot demand. Over the past month, Bitcoin futures open interest increased by approximately $10 billion to $58 billion, while spot trading volume dropped to a two-year low. When Bitcoin broke above $70,000, a large number of shorts were forcibly liquidated, triggering a buying wave that pushed prices higher. Wintermute warns that the rally lacking spot demand support is fragile, and the market could face a sharp reversal. In the long term, spot ETF inflows recently totaled $623 million, and Bitcoin holdings on exchanges have fallen to a seven-year low, but these factors are insufficient to offset short-term risks. U.S. CPI data exceeding expectations and uncertainties surrounding the Federal Reserve chair nomination could also intensify market pressure. Wintermute states that $85,000 is still possible, but the current risk-reward ratio for buying at this level is poor.

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