Bitcoin rose 4% this week from $76,351 to $79,447, but CryptoQuant analyst Carmelo Aleman believes the move was not fueled by genuine buying. Instead, it originated from the futures market as short sellers were forced out of positions in a $1.19 billion short squeeze.
Derivatives Drove the Rally, Not Spot Demand
According to Aleman, Bitcoin's open interest across all exchanges jumped from around $24.8 billion to nearly $28 billion during the rally. This sharp increase suggests traders heavily added leveraged positions using borrowed money rather than fresh capital entering the spot market. As prices climbed, short sellers had to close their positions, triggering a chain reaction that pushed Bitcoin higher. Aleman noted: "As long as price depends more on derivatives than on solid spot validation, the structure will remain vulnerable to reversal."
Over $1.1 Billion in Short Liquidations Shook the Market
Data shared by the analyst reveals a clear spike in short liquidations. On April 22, Bitcoin short liquidations across all exchanges exceeded $607 million in a single day. Ethereum wasn't far behind, with $581 million in short liquidations on the same day. Combined, total short liquidations reached approximately $1.19 billion, wiping out short positions in one session. The forced liquidations created a buying wave that pushed prices up sharply, but Aleman stressed it was not real demand. Long liquidations were much smaller, totaling just over $111 million across both assets.
$9.87 Billion Options Expiry Added Uncertainty
Adding to the pressure, a large batch of options expired. Deribit data shows about $9.87 billion in Bitcoin and Ethereum options contracts expired today. Bitcoin's max pain level sits near $72,000, well below the current market price, while its put-to-call ratio of 0.93 indicates near-balanced bearish and bullish positions. Ethereum's put-to-call ratio of 0.72 leans slightly bullish, with ETH trading around $2,315, above its max pain level of $2,200.
What's Next for Bitcoin?
The overall trend remains positive, with Bitcoin forming higher highs and higher lows through April. However, a stronger move likely depends on real spot buyers stepping in. If that demand picks up, Bitcoin could attempt to break above the $80,000 level again. For now, the rally's fragility keeps the market cautious.