The past 24 hours have witnessed bitcoin (BTC) record all-time highs (ATHs) again and again, with the latest being at almost $119,000. While it is evident that institutional demand and whale movements are driving this rally, analysts have identified another cohort of investors who have contributed to the surge.

According to a tweet by the market insights firm, Glassnode, demand from leveraged traders is playing a bigger role in this rally than spot investors.

Leveraged Demand Drives BTC Rally

Glassnode revealed that Bitcoin’s spot Cumulative Volume Delta (CVD) has been on a decline for weeks. CVD analyzes investor sentiment by telling whether aggressive buyers or sellers are dominating the market. The metric measures trading activity by comparing buying and selling volume over a period.

Over the past weeks, bitcoin’s spot CVD has recorded rare buy-side spikes, with the latest being on July 9. Conversely, futures CVD has been more reactive. The futures market has recorded frequent buy-side spikes, indicating that traders have been buying BTC aggressively.

Since BTC touched $112,000, spot traders have been selling, while futures investors have been buying. Funding for the spot market has remained low and even became negative at some point.

As a result, this bitcoin rally has been fueled more by leverage than spot demand. Futures traders have been buying more; however, the market has witnessed little confirmation from spot investors. Notably, Glassnode said low funding is a sign that positioning is not yet crowded. Unfortunately, this shows a structurally fragile setup, which can only get better if spot interest returns.

No Signs of Overheating Yet

Glassnode’s analysis suggests there is no strong structural backing to support this rally. However, the Bitcoin market is yet to see any signs of overheating, meaning that there is still room for additional growth.

The market appears steady, alongside metrics like the Unspent Transaction Output (UTXO) and Short-term holder Spent Output Profit Ratio (SOPR). Others, like the Market Value to Realized Value (MVRV) and Miner Position Index (MPI), also signal that sell-side activity is muted. These indicators suggest that investors are cautiously optimistic and not eager to offload their assets.

While the market awaits bitcoin’s next move, there is a surge in open interest, with long positions dominating. This comes after shorts have been wiped out, with liquidations running close to $1 billion.