Bitcoin (BTC) Regains $95,000 as Heavy Liquidations Play a Role

Bitcoin (BTC) rebounded by 11% over the past week, remaining in sight of its two-month high around $95,000. The relief rally followed signals from the Trump administration about easing import tariffs, as well as strong corporate earnings reports.

This rally also brought a record $3.1 billion in net inflows to spot Bitcoin exchange-traded funds (ETFs) over five days, according to crypto analytics firm Glassnode. However, a key BTC derivatives indicator showed signs of bearish momentum, raising questions about whether the $100,000 target is still realistic.

Perpetual Bitcoin futures contracts, favored by retail traders for their close price tracking of the spot market, displayed a reversal in the funding rate. Typically, a positive funding rate indicates that buyers pay to maintain their positions, and a decrease in this rate is linked to bearish trends.

The sharp negative funding rates recorded on April 26 are highly unusual during bull markets, as they indicate stronger demand from sellers. This metric has been volatile since April 14, but sellers were caught off guard as Bitcoin’s price climbed above the $94,000 level.

Since April 21, over $450 million in BTC short positions have been liquidated, according to Webull. Some of the renewed confidence and Bitcoin’s price strength can be attributed to the S&P 500’s 7.1% weekly gain.

However, despite this optimism, US President Donald Trump reportedly said on April 25 that negotiations would depend on China making concessions, causing traders to question the sustainability of recent gains.

Companies are now reporting first-quarter earnings from before the escalation of the trade war, so the factors driving the stock market and Bitcoin are different. In fact, Bitcoin’s price is no longer closely correlated with the S&P 500.

Currently, the 30-day correlation between the S&P 500 and Bitcoin stands at 29%, which is significantly lower than the 60% level seen from March to mid-April. While this lower correlation does not mean a complete decoupling, since investor sentiment is still influenced by macroeconomic factors, it does show that Bitcoin is not simply a proxy for technology stocks.

This aligns with the narrative of Bitcoin becoming an increasingly independent asset, which is also supported by the fact that gold failed to sustain its bullish momentum after hitting an all-time high of $3,500 on April 22.

Some traders had questioned the “digital gold” narrative, but the longer BTC remains above $90,000, the more confidence investors may have, potentially paving the way for further gains.

The increased demand for bearish leverage in perpetual BTC futures does not align with the sentiment of professional traders. Monthly Bitcoin futures contracts avoid fluctuating funding rates, so traders know their leverage costs in advance.

On April 26, the two-month Bitcoin futures premium (basis rate) rose to its highest level in seven weeks, indicating greater interest in bullish positions. At 6.5%, this metric remains within the neutral 5% to 10% range, but is moving away from bearish territory.

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varying demand for leverage in perpetual futures and monthly BTC contracts is common. Even if retail traders remain cautious, substantial accumulation by institutions could be enough to push Bitcoin’s price above $100,000 in the near future.