Bitcoin traders bet big, but is this rally built on fragile leverage?

Key Takeaways

Bitcoin’s Open interest and Funding Rates remain elevated, signaling strong leveraged bullish positioning. Exchange inflows rise while MPI stays negative, suggesting mixed pressure.

Bitcoin’s [BTC] derivatives market remains highly active as Open Interest holds near $42 billion and Funding Rates stay positive, signaling a sustained appetite for leveraged long positions. 

These elevated levels suggest that traders expect further upside and are willing to pay premiums to stay long. 

However, this aggressive positioning may increase downside risks if prices turn sharply, potentially triggering forced liquidations.

With sentiment heating up and futures exposure piling on, the market could become vulnerable to abrupt swings. 

Therefore, this bullish mood must be balanced with caution, as volatility often follows periods of extreme leverage.

Source: CryptoQuant

Can Bitcoin sustain support?

Bitcoin traded above the crucial $117,000 support, but the Parabolic SAR dots have flipped above the current price, signaling a potential pause or reversal in bullish momentum.

Meanwhile, the RSI sat at 67, slightly below the overbought threshold. This combination suggested that buying pressure may be waning, even though the broader structure remains intact.

If bulls manage to reclaim momentum and push past $121,600 resistance, the uptrend could resume.

However, if price weakens further and RSI cools off sharply, Bitcoin might retest the $111,800 support zone in the short term.

Source: TradingView

Why are more Bitcoins flowing into exchanges?

Total exchange netflows flipped positive by +871 BTC in the last 24 hours, marking a 9.28% increase in inflows. 

This suggests that some investors may be preparing to take profits or reduce exposure after the recent price surge. 

Despite the strong technical and derivative indicators, rising inflows to exchanges often precede sell-side activity. 

Therefore, while long interest remains dominant, the inflow shift may indicate growing caution among holders. If this trend continues, it could temporarily weigh on Bitcoin’s momentum. 

Still, the magnitude of the inflows remains relatively modest compared to past profit-taking events.

Source: CryptoQuant

Are miners supporting the rally by holding onto their coins?

The Miners’ Position Index (MPI) stands at -0.92, with a 23.41% increase in the past 24 hours. 

This negative MPI indicates that miners are currently sending fewer coins to exchanges than their one-year average, suggesting reduced selling pressure. 

Historically, low miner outflows have helped sustain bullish trends by limiting supply-side weight. 

This behavior implies confidence in Bitcoin’s current price levels and future potential. However, any sudden shift in miner behavior could quickly reverse market sentiment. 

For now, miner restraint provides additional support for the ongoing uptrend as long as this trend holds steady.

Source: CryptoQuant

Is Bitcoin still undervalued?

The NVT Golden Cross sits at -1.96, having climbed 18.33% in 24 hours. This metric, which compares network value to transaction volume, currently signals that Bitcoin may be undervalued relative to on-chain activity. 

Historically, values below zero have preceded major bullish moves, especially when paired with strong price structure and holding behavior. 

While this doesn’t guarantee further gains, it strengthens the argument that Bitcoin’s recent rally is supported by real network utility. 

If transactional demand continues to grow, valuation metrics may continue to favor bulls, offering more room for price expansion without overheating.

Source: CryptoQuant

Will Bitcoin’s bullish momentum continue?

Bitcoin’s outlook remains bullish, supported by reduced miner selling, strong derivatives activity, and undervaluation signals. However, caution emerges from exchange inflows and an overheated RSI.

Whether the rally continues or stalls will depend on how leveraged positions hold up during volatility. A break below $117K could shift momentum short term, but holding this level may renew bullish confidence.