Bitcoin spot buying intensifies while the likelihood of a short squeeze grows

Bitcoin’s 2026 Surge Driven by Spot Market Activity

In 2026, Bitcoin has climbed approximately 10%, currently trading just under $97,000. This upward movement appears to be fueled mainly by direct purchases in the spot market, rather than by leveraged trades in the futures market.

Spot vs. Futures: Understanding the Difference

Spot trading involves buying Bitcoin for immediate ownership and delivery. In contrast, futures contracts allow investors to speculate on price movements using leverage, without actually holding the cryptocurrency itself.

Why Spot-Led Growth Matters

When a rally is powered by spot buying, it typically signals authentic demand from investors, as opposed to speculative bets made with borrowed funds. Recent data indicates that Bitcoin’s rise from $90,000 to $97,000 over the past week has shifted from being leverage-driven to being supported by spot purchases.

Leverage Remains Stable

Supporting this perspective, reports show that open interest in Bitcoin futures stands at 678,000 BTC, nearly unchanged from 679,000 BTC on January 8. This suggests that the overall level of leverage in the market has not significantly increased during the rally.

Negative Funding Rates and Short Squeeze Potential

Adding further context, Glassnode data shows that perpetual futures funding rates are currently negative. Funding rates are periodic payments exchanged between traders holding long and short positions: positive rates mean longs pay shorts, while negative rates mean shorts pay longs. If Bitcoin’s spot price continues to rise while funding rates remain negative, short sellers could be forced to exit their positions rapidly, potentially triggering a short squeeze and accelerating price gains.

Comparing Bitcoin and Nasdaq 100 Performance

While Bitcoin has gained 10% year-to-date, the Nasdaq 100 has remained relatively unchanged. This divergence may reinforce the narrative of investors rotating into Bitcoin, viewing it as a high-beta, tech-like asset. Such a shift could attract additional capital and further support the ongoing rally.