Bitcoin Ends Q2 With 30% Gains Despite Speculative Rally

Bitcoin is ending the second quarter of the year on a strong note, with a 7% weekly gain and 30% quarterly gains, despite macroeconomic headwinds such as April’s sharp correction, the Federal Reserve’s hawkish tone, and geopolitical tensions in the Middle East. However, the rally is not as robust as it appears, with the Spot vs. Derivative Volume Ratio plunging to 0.05 by end-May, a level last seen pre-election, indicating that the rally is driven by speculative flows rather than organic spot demand.

Three key catalysts are driving the volatility in Bitcoin prices this week. First, the U.S. economic reports, including a speech by the Federal Reserve Chair, data releases on non-farm payrolls, unemployment, and manufacturing activity, will be crucial in shaping expectations for the next FOMC meeting. Markets are already leaning dovish, with a 7.7% drop in the 10-year U.S. Treasury yield this week. However, overall sentiment remains cautious, with 82% odds against a rate cut due to persistent inflation and renewed tariff risks.

Second, Bitcoin buyers are piling in hard, with Deribit’s Taker Buy/Sell Ratio surging to an extreme 12.5, signaling clear dominance from aggressive longs. Across all exchanges, the ratio has climbed back to early June levels, while Open Interest was up 1.63% to $72 billion. This indicates that leverage is building again, with technical indicators remaining neutral and sentiment not tipping into euphoria. However, the rally is still being driven by speculative flows, not organic spot demand.

Third, the conditions are eerily reminiscent of early April, with July front-running critical macro reports, Trump’s high-stakes tariffs coming back into play, and futures traders piling into longs as if a rate cut is guaranteed. If this week’s data breaks against expectations, and leverage remains elevated, the downside risk is real, with a potential 20%+ correction looming.

In summary, Bitcoin is ending the second quarter on a strong note, but the rally is driven by speculative flows rather than organic spot demand. Three key catalysts are driving the volatility in Bitcoin prices this week, including U.S. economic reports, aggressive longs by Bitcoin buyers, and the potential for a 20%+ correction if data breaks against expectations and leverage remains elevated. Overall, the conditions are reminiscent of early April, with a potential for a sharp correction if the data does not meet expectations.