Bitcoin Holds Support at Highs as 'Bull Market Extension' and 'Leverage Bomb' Views Collide
Bitcoin Holds Support at Highs as 'Bull Market Extension' and 'Leverage Bomb' Views Collide
Bitcoin (BTC) is drawing both optimism that it remains on track to extend its bull market after confirming strong support near its all-time high, and caution that a correction may be imminent due to excessive leverage.
According to cryptocurrency outlet Decrypt on February 11 (local time), Bitcoin has entered a critical technical inflection point as it searches for direction following a sharp rally. Market analysts cite policy support from U.S. President-elect Donald Trump and the full-scale participation of institutional finance as key drivers of the bull market. At the same time, warnings are emerging that overheating in the futures market and macroeconomic uncertainty could increase short-term downside pressure.
The core of the bullish scenario lies in sustained capital inflows through spot Bitcoin ETFs and a decline in exchange reserves. Investors are paying attention to signs that the U.S. government may seek to stockpile Bitcoin as a strategic national asset, contributing to a rise in long-term holdings. Experts say that unless the supply-demand imbalance is resolved, Bitcoin is likely to break above the psychological resistance level of $100,000 and enter a new price discovery phase.
Bears, however, point to open interest in the futures market reaching risky levels as a signal of an impending price correction. Elevated funding rates indicate an excessive concentration in long positions, creating a fragile structure where even a minor shock could trigger cascading liquidations. Additionally, inflation concerns are increasing the likelihood that the Federal Reserve may adjust the pace of interest rate cuts, posing a potential headwind for risk assets such as Bitcoin.
On-chain analytics show that market sentiment among participants remains in the greed phase, historically a sign of short-term tops. Santiment reported a surge in retail investor inflows, contributing to heightened market volatility. Nevertheless, unlike previous bear markets, many analysts believe that strong institutional buying support will help limit the scope of any correction.
Bitcoin is currently pausing for breath at the intersection of policy-driven optimism and technical overheating. While many believe that even if short-term leverage liquidations occur, the mid- to long-term uptrend will remain intact, volatility could expand depending on whether key support levels hold. Investors are advised to respond cautiously while monitoring macroeconomic indicators and government policy announcements.
Disclaimer: This article is for investment reference only and we are not responsible for any investment losses resulting from it. The content should be interpreted for informational purposes only.
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