Analysis: Bitcoin surged and then fell back, breaking below $70,000, with institutional spot buying and derivatives short selling locked in a stalemate.

Bitcoin has fallen below $70,000, and the market is currently showing a clear divergence. Institutional spot buying continues to accumulate Bitcoin, while derivatives traders are constantly increasing their short positions. Historically, when spot accumulation and negative funding rates occur simultaneously, it often triggers a "short squeeze," where short sellers are forced to close their positions, pushing prices upward. However, this outcome is not inevitable. Analysts believe that this pullback mainly reflects profit-taking pressure from short-term traders. Some investors chose to cash out after buying during the rebound. Although there has been a recent rebound, the market still lacks sufficient confidence in whether the upward trend can be sustained. The derivatives market sentiment is also pessimistic, with funding rates remaining significantly negative, meaning that traders are paying fees to maintain their short positions, but at the same time, spot demand remains. Recently, the amount of stablecoins flowing into exchanges has reached a new high since 2026, and spot Bitcoin ETFs have also seen a return to net inflows. (CoinDesk)