Lately, leverage has been quietly reasserting itself as the main driver of Bitcoin’s [BTC] momentum. In fact, the recent breakout triggered an aggressive short squeeze, forcing traders to unwind bearish positions at scale.
According to Glassnode , this was the largest short-liquidation event across the top 500 cryptocurrencies since 10 October 2025.
On the charts, liquidation spikes aligned tightly with Bitcoin’s push to its local highs.
Traders wiped out millions in short exposure within a short time window, and forced buybacks chased Bitcoin’s price higher and reinforced upside pressure. This behavior has been building since late 2025, but the intensity accelerated as Bitcoin held elevated levels instead of retracing.
If current liquidations continue, Bitcoin could climb towards the $100,000-$105,000 zone backed by momentum alone.
However, if funding cools and Open Interest resets, the price may consolidate. Past squeezes have shown that sustainability often depends on spot demand replacing leverage.
OG supply pullback signals shift in market control
That’s not all though. OG Bitcoin Holders are no longer distributing at the pace seen previously in this cycle. STXO data from coins dormant for over five years revealed a clear slowdown in long-term holder spending.
Data from CryptoQuant confirmed that OGs were highly active into 2024, using institutional demand and government buying as ideal exit liquidity.
However, that behavior has since shifted. Earlier in the cycle, OG spending peaked near 3,800 BTC. It then cooled to 3,200 BTC, followed by 2,200 BTC.
In the short term, lighter OG selling reduces overhead supply and supports price stability. On the contrary, in the long term, this behavior signals conviction.
Historically, OG restraint aligns with accumulation phases rather than late-cycle distribution.
Whales hedge as retail commits – Who breaks first?
The chart revealed a clear divergence. First, whales unwind long exposure. Then, they rotate into shorts. This shift appeared to be deliberate.
Usually, when the price sits near elevated levels, momentum fades. At the same time, leverage quietly rebuilds. As a result, the risk skews to the downside.
In this particular case, the whales reacted early because they saw crowded positioning and late-cycle behavior. Moreover, OG Bitcoin holders are no longer distributing aggressively.
This has isolated organic sell pressure, while leaving leverage as the main driver of the market.
Retail traders move the other way. They chase upside. They respond to price, not structure. Consequently, they add longs as volatility expands.
For example – On-chain data from Alphractal showed whales closing longs and flipping shorts as Bitcoin approached $69,000. Retail traders did the opposite and added leveraged longs. Shortly after, Bitcoin corrected by nearly 20%, falling from $69,000 to $56,000 before stabilizing.
Such a setup implies a potential shakeout or cooling phase. If leverage unwinds, the price will likely retrace before any sustainable continuation.
All in all, Bitcoin’s structure is clear. Leverage, not spot demand, may be driving momentum. Short liquidations lifted the price, while OG selling slowed and whales turned defensive. This has not only tightened supply, but raised fragility too.
Therefore, the upside will remains vulnerable. Sustainable gains require spot demand to replace leverage.
Without the same, there will be volatility risk, leaving any further extension vulnerable to a corrective reset.
Final Thoughts
- Leverage now drives Bitcoin’s momentum, with short liquidations lifting the price while spot demand has become secondary.
- Smart money may be turning cautious, as whales hedge and OG holders slow selling.
