BTC Spot Premium Signal Warning: Can the rebound break through 117,000 with key liquidity support

gas_fee_therapy · 2025-12-26T19:58:40+00:00

For BTC to continue rising, a large-scale short squeeze must be triggered, but the spot market premium has turned negative, indicating a lack of support for the rebound. The high futures funding rates suggest the market is overly optimistic, and traders face a dilemma between consolidating or breaking down. The future trend is uncertain and depends on the situation of short squeezes.

gas_fee_therapy

2025-12-26 19:58:40

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From on-chain data, for BTC to continue its upward trend, a large-scale short squeeze needs to be triggered, and this process is very likely to evolve into a sharp decline.

Spot Premium Fails, Rebound Lacks Substantial Support

Currently, BTC’s spot premium has fallen to around -200 during this small upward correction. Looking back at history, when BTC first broke through 120,000, market sentiment was highly optimistic, and the premium was also around -200. Such extreme premiums reflect a phenomenon: the rise from 118,000 to 120,500 is essentially driven by aggressive long positions in futures contracts pushing prices higher, while major players in the spot market are offloading at high levels. In other words, this kind of price increase lacks sustainable buying support.

High Funding Rates Expose Excessive Market Optimism

The weighted futures funding rate has rebounded to the level seen when BTC first broke through 120,000, indicating that contract traders are panic-buying, fearing missing out on this bull run. This anxious sentiment itself is a risk signal—when most people are rushing to go long, it often foreshadows a reversal in volatility.

Consolidation or Breakdown: Traders Face Dilemma

Although sustained upward movement is unlikely in the short term, BTC is more likely to enter a short-term consolidation range, which means the risk of chasing longs is very high. Historically, when BTC reached a high of 122,000 after spot prices hovered around 117,000-118,000, it quickly entered a correction and consolidation phase. This suggests that even if a new breakout occurs, there is a significant probability of a similar pattern, but risks are also present.

Therefore, traders currently lack a clear upper breakout target— the only reliable reference is the resistance level formed by historical highs. Other price levels are difficult to serve as dependable trading signals. When facing strong spot selling pressure at 122,000, BTC has already issued a signal; the next move depends on whether short positions are sufficiently squeezed.

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