Over the past day, Bitcoin [BTC] has surged to hit its highest levels since March 3, 2025. In fact, Bitcoin has traded above $95k for the first time in almost 2 months.
As of this writing, Bitcoin was trading at $95096. This marked a 12.65% increase in weekly charts. Although prices are seeing massive pumps, BTC's short-term holders are taking a different path.
Short-term holders have taken advantage of the recent rally to make a profit. This group of holders has been at a loss for the past three months. After surpassing their realized price of $92k three days ago, they are now actively selling coins thus slowing growth.
Despite increased selling activity from STHs, Over the past three days, demand on exchanges has completely absorbed this sell-off. We can see this demand as exchange netflow has declined to hit the highest negative value in 30 days.
Currently, the exchange netflow sits at -$28.3 million. The drop here suggests increased accumulation with outflows outweighing inflows. Thus, buyers are dominating the market.
Over the same period, Open Interest in perpetual swaps has risen to 281K $BTC, up +15.6% since early March. This suggests a build-up of leverage in the market as prices rebound, increasing the potential for amplified volatility via liquidations and stop-outs.
Despite the rising OI, the average funding rate has declined to -0.023% according to Glassnode. A negative funding rate means that markets are experiencing a high demand for short positions relative to long ones.
This suggests that BTC traders are fading the rally setting up a possible short-squeeze scenario as prices continue to rise.
This market behavior is further evidenced by the fact that the 7DMA of long-side funding premiums has declined to $88k/hour and continues to drop. Such a decline points to a reduced appetite for BTC long positions thus reinforcing our earlier observation that short bias dominates current perptual swap positions.
With short positions dominating the market, it suggests that Bitcoin's rally to $95k is driven by a short squeeze. Often, when traders take a high amount of short positions, prices rise resulting from a high buying pressure from shorts.
As prices rise higher, they rush to cover their positions resulting in a short squeeze. This buying pressure leads to higher prices.
Currently, Bitcoin is experiencing strong upward momentum as buyers dominate the market. The only barrier to further rallying is the short-term holders.
For this cohort, the next level to watch is $96k which is the average entry price for the STH cohort holding coins for 3-6 months. A breach of this resistance level will strengthen BTC to rally past $100k as all short-term holders will be in profit.
On-Chain Media articles are for educational purposes only. We strive to provide accurate and timely information. This information should not be construed as financial advice or an endorsement of any particular cryptocurrency, project, or service. The cryptocurrency market is highly volatile and unpredictable.Before making any investment decisions, you are strongly encouraged to conduct your own independent research and due diligence
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