Bitcoin's recent rally to an eight-month high near $87,400 has reclaimed a long-term technical threshold, yet emerging data suggests the momentum supporting the advance may be losing strength.
The digital asset's Bull Score Index reached 90 out of 100, consistent with broadly favorable market conditions. However, beneath this surface strength, the sources of demand driving the rally have begun to contract.
Spot Demand Weakens Across Multiple Channels
Spot buying activity has declined noticeably. Apparent spot demand contracted by approximately 170,000 BTC over the past 30 days, indicating that cash-market purchasing has failed to keep pace with Bitcoin's advance.
US exchange-traded fund flows reinforce this trend. Daily ETF inflows declined by 97% over one week, falling from around $1 billion to just $31 million by September 28.
Speculative demand has cooled even more sharply. Futures demand growth fell to approximately 16,000 BTC from 164,000 BTC on September 14, removing a key source of incremental buying pressure.
Profit-Taking Accelerates as Unrealized Gains Mount
The slowdown in demand is becoming more significant because existing holders sit on substantial unrealized gains. Short-term traders' unrealized profit margin climbed to 33%, its highest level since December 2024.
Bitcoin holders realized profits on 25,700 BTC on September 22, marking the largest single-day total of 2026. This profit-taking represents a widening gap between fresh buying and profitable supply available for sale.
Market Structure Increasingly Dependent on Derivatives
Bitcoin's market has become heavily skewed toward derivatives trading. The spot-to-futures volume ratio on Binance sits at approximately 0.12, meaning roughly 90% of combined trading activity occurs in futures contracts.
Open interest on Binance dropped to about $9.2 billion from $10.6 billion over one week. Broader coin-denominated open interest fell nearly 20% to its lowest level since March despite the recent market rally.
Liquidation Risk Shifts to Long Positions
Bitcoin's advance swept through large clusters of short positions accumulated over the past year, forcing bearish traders to exit as prices accelerated. This short-liquidation activity initially reinforced the rally through forced buying.
That source of forced buying has largely been exhausted. Largest unliquidated position clusters are now concentrated on the long side, shifting the market's liquidation exposure. A price decline could trigger concentrated long positions to liquidate, creating forced selling pressure.
Large investors have not yet signaled sustained bullishness. While whales showed relative bullish positioning compared to smaller traders, this shift failed to persist.
Support Levels Become Critical
The 365-day moving average sits near $80,000, the level Bitcoin reclaimed when the new bull phase began. Below that, the 200-day moving average stands near $71,000, with traders' realized price around $67,000.
A sustained retreat toward $80,000 would test how well the recent breakout withstands the shift in demand and positioning dynamics.
