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Bitcoin Rally Faces Sustainability Risk From Weak Spot Demand

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Bitcoin Rally Faces Sustainability Risk From Weak Spot Demand

  • CryptoQuant said bitcoin’s current rally may be unsustainable because spot-market demand remains weak.

  • The market structure increasingly resembles January-February and March 2026, when derivatives played a major role, according to the firm.

  • CryptoQuant said an August 21 surge in trading volumes alongside a 24% bitcoin price rise may signal an early shift from a bear phase to a bull phase.

CryptoQuant said the current bitcoin rally may lack sustainability because demand in the spot market remains weak. The firm said the market structure increasingly resembles January-February and March 2026, when derivatives played a major role.

Analysts said a rally without sustained spot demand appears less convincing. Under those conditions, they recommended focusing more on risk management than on expectations that the rally will continue.

Trading volumes rebound

Separate CryptoQuant data indicated a notable recovery in trading activity. After falling to multiyear lows during the bear market, volumes in the spot and perpetual-futures markets surged on August 21 as bitcoin’s price increased.

Previous volume spikes mostly coincided with sell-offs. This time, the increase in activity accompanied a 24% rise in bitcoin, which CryptoQuant said indicated that buying dominated.

Analysts said the rebound in trading volumes could be one sign that the market is moving from a bear phase into a bull phase.

Experts had previously warned that retail euphoria could raise the risk of a bitcoin correction.

Source: Incrypted

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