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Bitcoin is resilient, but leverage is missing and demand still tepid

By CoinDesk

“Bitcoin is resilient,” CZ, founder of Binance, declared on X.

The view is consistent with how bitcoin (BTC) and the wider crypto market have surged and held on to gains after the initial knee-jerk reaction lower in early Asian trading on Wednesday following reports of a Democratic sweep in the midterm elections.

However, as of writing, two things are missing, and both call for caution on the part of bulls.

First, there is little sign of fresh leverage entering the market, as evident from bitcoin’s futures open interest (OI), which has held largely unchanged at $53.40 billion, according to data source Coinglass. The same is true for many other coins, including SOL, HYPE, DOGE, NEAR and others, where OI has either held flat or declined amid the price rise.

This is a sign of a lack of fresh capital inflows, contrary to new inflows chasing upside when markets rally.

Secondly, spot-side indicators also remain tepid. The spot ETFs listed in the U.S. pulled in just $74 million in investor money on Wednesday. This follows outflows of over $400 million in the first two trading days and over $500 million last month, according to data source SoSoValue.

The Coinbase Premium indicator, a widely tracked measure for assessing relative demand from U.S.-based investors, also remains negative. Historically, this has been positive during sustained uptrends.

Read futures and spot market activity together, and it appears price gains were driven largely by the unwinding of shorts. In the past 24 hours, crypto futures shorts worth $450 million have been liquidated, with BTC alone accounting for $300 million of that — the highest since Sept. 21.

Analysts at Marex say spot demand now needs to take over.

“BTC reclaimed $80k as lower yields, a weaker dollar and cheaper oil revived the risk bid. Shorts funded the first leg. Spot flows and a cleaner derivatives structure now need to carry the second,” they said in an email.

India-based FIU-registered Giottus called it a relief rally and awaits more signs of uptrend confirmation.

“Treat this as a relief rally until stronger confirmation emerges. Avoid chasing sharp moves. Use staggered entries, keep position sizes modest and watch ETF flows and upcoming US labour-market data before increasing exposure,” the exchange’s CEO Vikram Subburaj said. Stay alert!

Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead."

What’s trending

Today’s signal

Bitcoin’s Coinbase Premium indicator remains negative, extending a weeks-long bearish signal streak.

It means bitcoin is trading at a slight discount on Nasdaq-listed Coinbase relative to offshore giant Binance.

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