Bitcoin Surges Amid Leverage-Driven Price Action – Will It Last?

bitcoinistPublished on 2025-04-13Last updated on 2025-04-13

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Bitcoin is now trading above the $85,000 mark following an impressive rally that began on Wednesday after US President Donald...

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Bitcoin is now trading above the $85,000 mark following an impressive rally that began on Wednesday after US President Donald Trump announced a 90-day pause on reciprocal tariffs for all countries except China. The announcement injected a wave of optimism across financial markets, helping to ease investor fears and ignite fresh momentum in the crypto space. Since then, BTC has surged more than 15%, marking one of its strongest short-term recoveries in recent weeks.

Related Reading: Bitcoin Leverage Shrinks: Long Liquidations Drop To $1.2B As Traders Turn Cautious

Market sentiment has shifted quickly as buyers step back in, and Bitcoin’s strength above key technical levels suggests growing confidence among traders. However, beneath the surface, there are signs that caution is warranted. According to new insights from CryptoQuant, this rally appears to be driven in large part by leverage. Analysts warn that a leverage-driven pump is underway, not just in Bitcoin, but also across major altcoins, which could introduce heightened volatility in the coming sessions.

While the recent bounce has revived bullish hopes, the reliance on leveraged positions could leave the market vulnerable to sharp reversals. Whether this momentum can be sustained or leads to another round of liquidations remains the key question in the days ahead.

Bitcoin Faces Critical Test Amid Leverage-Driven Rally

Bitcoin is now facing a critical test as bulls attempt to reclaim the $90,000 level, a key threshold that could confirm a recovery rally and signal the end of the recent downtrend. After weeks of relentless selling pressure and macroeconomic uncertainty, Bitcoin has bounced strongly from sub-$75K levels, now trading just above $85K. Yet despite this impressive rebound, the broader market remains on edge.

Global tensions, particularly those surrounding US trade policy and the risk of a broader economic slowdown, continue to inject volatility into financial markets. Bitcoin, often seen as a high-risk asset, remains 22% down from its all-time highs as it attempts to rebuild momentum. While bulls are showing signs of strength, concerns are mounting that the recent surge may not be entirely organic.

Top analyst Maartunn shared on X that this latest move appears to be a leverage-driven pump. His data shows a significant uptick in Bitcoin’s Open Interest alongside the price surge — a signal that leveraged positions are fueling the rally. According to Maartun, this behavior is not isolated to Bitcoin. Ethereum (ETH) and Ripple (XRP) are also showing similar leverage-driven characteristics.

Bitcoin Price & OI Change | Source: Maartunn on X
Bitcoin Price & OI Change | Source: Maartunn on X

This trend introduces the risk of sharp corrections if positions are unwound suddenly. With funding rates and open interest climbing across major assets, the next few days will be crucial. If bulls can push BTC above $90K and sustain momentum, the recovery may continue. But failure to break this resistance — combined with excessive leverage — could lead to another round of long liquidations and renewed selling pressure.

Related Reading: Ethereum Leads Market-Wide Drawdown As Altcoin Correlation Spikes – Details

Testing Key Technical Levels Amid Recovery Attempt

Bitcoin is currently trading at $84,900 as bulls test a major technical milestone: the 200-day Exponential Moving Average (EMA). Just above lies the 200-day Simple Moving Average (SMA) near $87,300, placing BTC less than 3% away from breaking through both critical resistance zones. These indicators often serve as long-term trend signals, and reclaiming them would strengthen the case for a full recovery rally.

BTC testing the 200-day EMA | Source: BTCUSDT chart on TradingView
BTC testing the 200-day EMA | Source: BTCUSDT chart on TradingView

If bulls manage to push the price above the recent local high at $88,800, it could confirm a short-term trend reversal and open the path toward $94K and beyond. Momentum is building following a 15% surge over the past few days, supported in part by macroeconomic relief, including a 90-day pause on US tariffs.

Related Reading: Bitcoin Funding Rate Turns Negative: Bullish Signal In Disguise?

However, risks remain. Failing to hold the $82K support level would be a bearish signal, likely triggering increased selling pressure. A decisive move below $82K could drag BTC back under $80K, erasing recent gains and placing bulls on the defensive once again. With volatility still elevated and market sentiment mixed, the coming days will be crucial in determining whether BTC can sustain this upward momentum or face renewed downside.

Featured image from Dall-E, chart from TradingView 

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Sebastian Villafuerte

Sebastian Villafuerte

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Sebastian's journey into the world of crypto began four years ago, driven by a fascination with the potential of blockchain technology to revolutionize financial systems. His initial exploration focused on understanding the intricacies of various crypto projects, particularly those focused on building innovative financial solutions. Through countless hours of research and learning, Sebastian developed a deep understanding of the underlying technologies, market dynamics, and potential applications of cryptocurrencies. As his knowledge grew, Sebastian felt compelled to share his insights with others. He began actively contributing to online discussions on platforms like X and LinkedIn, focusing on fintech and crypto-related content. His goal was to expose valuable trends and insights to a wider audience, fostering a deeper understanding of the rapidly evolving crypto landscape. Sebastian's contributions quickly gained recognition, and he became a trusted voice in the online crypto community. To further enhance his expertise, Sebastian pursued a UC Berkeley Fintech: Frameworks, Applications, and Strategies certification. This rigorous program equipped him with valuable skills and knowledge regarding Financial Technology, bridging the gap between traditional finance (TradFi) and decentralized finance (DeFi). The certification deepened his understanding of the broader financial landscape and its intersection with blockchain technology. Sebastian's passion for finance and writing is evident in his work. He enjoys delving into financial research, analyzing market trends, and exploring the latest developments in the crypto space. In his spare time, Sebastian can often be found immersed in charts, studying 10-K forms, or engaging in thought-provoking discussions about the future of finance. Sebastian's journey as a crypto analyst and investor has been marked by a relentless pursuit of knowledge and a dedication to sharing his insights. His ability to navigate the complex world of crypto, combined with his passion for financial research and communication, makes him a valuable asset to the industry. As the crypto landscape continues to evolve, Sebastian remains at the forefront, providing valuable insights and contributing to the growth of this revolutionary technology.

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