Bitcoin’s recent rally from approximately $63,500 to more than $80,000 appears to have been driven by strong spot demand rather than leveraged trading, according to an assessment from QCP Capital.
Bitcoin rally shows healthier market structure
QCP Capital reported that roughly $2.8 billion flowed into spot Bitcoin ETFs during Bitcoin’s rise from $63,500. At the same time, open interest in Bitcoin futures declined from about 646,000 BTC in mid-August to 588,000 BTC.
Relatively low funding rates also suggest that the price increase was not fueled by aggressive leveraged long positions. QCP said spot purchases and the closing of short positions were particularly prominent during the rally.
The limited accumulation of excessive leverage could point to a more sustainable market structure for Bitcoin than in previous speculative rallies.
Federal Reserve and US Treasury remain in focus
Despite Bitcoin’s positive technical structure, the broader macroeconomic outlook remains uncertain. Core PCE inflation held at 3.3% year over year in July, while markets are pricing in a 35% probability that the Federal Reserve will raise interest rates by 25 basis points at its September meeting.
Meanwhile, the expansion of the US Treasury’s repurchase program for long-term bonds is supporting risk assets. Beginning September 9, the Treasury will raise the upper limit for each repurchase operation involving 10- to 30-year bonds from $2 billion to at least $4 billion.
After the announcement, long-term bond yields declined and the dollar index weakened, while gold and Bitcoin prices moved higher.
QCP also said Nvidia’s strong balance sheet had contributed to risk appetite across global markets.
However, the US Treasury’s bond repurchase program is not quantitative easing. The initiative is designed to improve liquidity in the long-term bond market rather than directly determine bond yields, and it does not create a QE-like expansion in central bank reserves.
According to QCP’s assessment, the key short-term question for Bitcoin is whether strong spot demand will continue.
This is not investment advice.
