Bitcoin experienced a 7% price correction following a surge in oil prices and higher-than-expected U.S. producer price index data. Despite the pullback, analysis indicates its bullish momentum persists, driven by strong spot market demand through U.S.-listed ETFs and MicroStrategy’s buying. Low leverage among bulls reduces liquidation risks, and rising inflation concerns could eventually shift investment from gold into Bitcoin.
Bitcoin faced a 7% correction after approaching $76,000. The downturn followed a decline in U.S. stocks as oil prices surged due to geopolitical tensions and wholesale prices gained 3.4% annually, the largest increase in 12 months.
Despite recent losses, there is no indication Bitcoin’s bullish momentum has faded. This assessment considers the resilience of the S&P 500, which traded only 4% below its all-time high despite weak job market data.
Investors grew more convinced the U.S. Federal Reserve will not ease monetary policy in 2026. Implied odds on futures markets showed the probability of a steady interest rate by September plummeted to 42% from 89% a month prior.
Sticky inflation and the prospect of a prolonged war reduced the odds of economic stimulus focused on expansion. However, pricing in interest rates relative to inflation expectations does not suggest traders anticipate an imminent crash.
Even if Bitcoin drops another 5%, there is no indication of excessive leverage demand from bulls. Recent bullish momentum has been supported by the spot market, especially through U.S.-listed spot Bitcoin ETF accumulation and MicroStrategy‘s aggressive buying activity.
CoinGlass estimates that $450 million in leveraged long Bitcoin futures would be liquidated down to $68,000. This represents less than 1% of the current $49 billion aggregate open interest.
The Bitcoin perpetual futures funding rate confirms bears are becoming overconfident as demand for leverage on short positions has increased. A negative funding rate means shorts are the ones paying to keep their positions open.
The indicator stood below the neutral 6% to 12% range even during Bitcoin’s surge above $76,000. This reinforces the thesis of spot demand sustaining momentum rather than speculation using derivatives markets.
Gold prices dropped to $4,900, showing signs of exhaustion after holding above $4,800 for weeks. An eventual rotation out of gold could be the trigger for a sustained Bitcoin rally, especially as inflation concerns negatively impact fixed-income returns.
