BTC Bounce Raises Questions Despite Strong IBIT Flows – Analyst Points To MSTR-Fueled Bitcoin Rally

• Bitcoin’s bounce is largely futures-driven, with weak on-chain demand despite ETF inflows, says CryptoQuant CEO Ki Young Ju on Monday.
• BlackRock’s iShares Bitcoin Trust saw $983 million in weekly inflows, its highest in six months, signaling strong institutional demand.
• Funding rates have tanked by 7% amid persistent bearish sentiment in derivatives, though it is typically short-lived.

Bitcoin’s (BTC) recent price action on Monday has sent mixed signals, with BlackRock’s Bitcoin ETF (IBIT) logging its strongest inflows in six months even as underlying on-chain demand remains weak, and analysts point to Strategy (MSTR) as a key driver of the rally.

CryptoQuant CEO Ki Young Ju said on Monday that “Bitcoin is currently futures-driven,” adding that “open interest is rising, but on-chain apparent demand remains net negative despite ETF inflows and Saylor buys.”

The CryptoQuant CEO also reported that BlackRock’s iShares Bitcoin Trust recorded $983 million in weekly inflows, its “highest level in six months,” showing a divergence between rising institutional participation and weaker on-chain demand signals.

iShares Bitcoin Trust’s price was down by 0.02% during pre-market hours, and the stock closed over $44 on Friday. On Stocktwits, the retail sentiment around IBIT remained in the ‘bullish’ zone, while chatter around it stayed ‘high’ over the past day.

Derivatives Activity Drives Short-Term Volatility

Additional market activity highlighted the role of derivatives in recent price swings. Bitcoin briefly approached the $80,000 level before facing a sharp correction, falling back below $78,000 within hours, according to data shared by on-chain analyst Darkfost.

The CryptoQuant analyst said the move was driven by heavy selling pressure in derivatives markets, noting that roughly $1.2 billion in sell volume hit Binance’s (BNB) order books in a single hour, with total selling pressure across exchanges reaching about $1.35 billion.

He added that the correction occurred as funding rates remained “deeply negative for several weeks,” with the indicator recently reaching around -7%, one of the most negative readings recorded.

Darkfost also noted that such conditions could create short-term selling pressure, though these setups have historically not lasted over the medium term.

Bitcoin’s price was trading over $77,644, down by 0.5% over the past 24 hours. On Stocktwits, the retail sentiment around BTC remained ‘bullish’ while chatter around it remained at ‘normal’ levels over the past day.

Is MSTR Behind The Bitcoin Rally?

10X Research also claimed that, rather than widespread market involvement, the current increase in Bitcoin seems to be driven by a limited number of demand sources. The data, according to 10x Research, indicates that while demand from Bitcoin futures has decreased, corporate buying, led by Strategy (MSTR), has been the main driver, along with modest inflows from stablecoins and ETFs. 

This discrepancy raises concerns about the depth and sustainability of the rally since it implies that a crucial bull market signal, synchronized growth across spot, leverage, and liquidity, is currently absent despite rising prices.

Read also: JPMorgan Sees Tokenized ETFs As The Next Big Thing, But Adoption Timeline Is Still Unclear

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