Bitcoin’s recent rally toward the $76,000 level may be driven by more than just speculative trading, as seen in recent surges. New data from CryptoQuant suggests there may be stronger fundamentals behind the rise. The analytics firm identified a notable divergence between the Bitcoin price and open interest on Binance, suggesting the uptrend is being fueled primarily by spot demand rather than leveraged trading.
February’s Bitcoin Spot Price vs Leverage Divergence
In a recent release, CryptoQuant suggested that spot accumulation and short covering are the real reasons behind Bitcoin’s latest surge.
Bitcoin climbed from $63,000 on February 5 to nearly $73,200 on February 14, and is now trending back above $75,000. However, during this same period, open interest on Binance told a completely different story. The 30-day Simple Moving Average of Binance BTC-USD open interest fell sharply from $1.9 billion to $1.19 billion, indicating that leverage was actually leaving the market as prices rose.
This divergence suggests that traders are reducing leveraged positions while spot buyers continue accumulating Bitcoin. In many cases, such market behavior points to stronger underlying demand rather than speculative momentum.
Why This Bitcoin Rally Could Be More Sustainable
Typically, when Bitcoin rallies strongly, open interest increases as traders open leveraged long positions. However, CryptoQuant observed the opposite pattern during the latest move.
This development is significant. According to CryptoQuant analyst CryptoOnchain, a price rally built on low leverage is typically considered more sustainable. The declining leverage significantly reduces the risk of sudden, severe liquidation cascades that can trigger sharp price reversals. This means Bitcoin’s recent upward movement may be more stable compared to leverage-driven rallies seen earlier in the cycle.
CryptoQuant also noted that a decline in open interest during a rally often signals short covering. In this scenario, traders who bet against Bitcoin are forced to close their positions as the price rises. Since it creates additional buying pressure, this process can accelerate price increases without adding excessive leverage to the market. As short sellers exit positions, they effectively contribute to upward momentum.
Current Rally Driven by Spot Demand
True to CryptoQuant’s observation, Bitcoin buying has surged recently. Strategy, the Bitcoin treasury firm, has been buying Bitcoin at a rate higher than the rate at which the asset is being mined for the past month. The company now holds almost 781,000 BTC in its coffers.
Other on-chain analytics firms have also reported a recent surge in Bitcoin buying. Recent CoinRemark coverage revealed that whales bought about $710 million’s worth of BTC in just three days.
Additionally, Bitcoin spot selling has dropped significantly, as CryptoQuant analyst Darkfost observed. The analyst reported that Bitcoin inflows to Binance have dropped to a 6-year low, indicating that investors are opting to hold rather than sell.
Historically, Bitcoin rallies fueled by heavy leverage often end with sharp liquidations when price momentum slows. In contrast, spot-driven rallies tend to develop more gradually and sustain momentum for longer periods. Hence, investors will be watching whether this low-leverage environment paves the way for sustained gains beyond $73,000.
Temitope Olajide
