Bitcoin Hits $64,500 as CryptoQuant Warns of Liquidity Trap
Bitcoin’s rebound has been driven largely by positioning in derivatives rather than a broad revival in spot buying. When short exposure is crowded, a rapid price increase can trigger forced liquidations that amplify gains. But without stronger trading volume, on-chain demand and inflows into spot Bitcoin exchange-traded funds, such moves can become distorted in thin liquidity, making the durability of the latest breakout a key test for the market.
Bitcoin rose as much as 3% on Monday to $64,500, setting off the largest wave of short liquidations in nearly a month. CryptoQuant said the advance bore the hallmarks of a derivatives-led short squeeze, while underlying spot demand remained weak. The on-chain analytics platform also pointed to continued net outflows from spot Bitcoin ETFs, warning that the move may be a low-volume liquidity trap rather than the start of a sustained rally.
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The history behind this eventBitcoin Bears Face $2.6 Billion Trap as Falling Funding Rates Raise Short-Squeeze Risk
Bitcoin had fallen 21% from its highs around June 5, 2026, briefly sliding to $61,100 on Friday and liquidating $335 million in leveraged long positions. Perpetual futures funding rates reflect demand for long and short leverage. Laevitas data showed the annualized rate falling to minus 2%, signaling long deleveraging and rising bearish bets while increasing the risk of forced short covering in a rebound.
CoinGlass data showed short positions concentrated between $63,000 and $66,000. If Bitcoin rebounds from $62,000 to $66,000, about $2.6 billion in shorts could be liquidated. By contrast, another 8% decline to $57,000 is estimated to liquidate $1.2 billion in longs. SoSoValue said spot ETFs recorded net inflows of just $3 million as of June 4 after $5.1 billion in outflows over 15 days, indicating the trend had yet to reverse.
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