**[Bitfinex: Bitcoin's Recent Surge Driven Mainly by Spot Demand and Short Covering, Profit-Taking Could Pose the Biggest Risk]** BlockBeats News, August 23: Bitcoin has recently surged to multi-month highs. Bitfinex analysts stated that the current rally is primarily driven by spot buying and short covering, rather than new leveraged funds. As a result, this rally may have a longer duration compared to typical short squeeze scenarios. Since investors who purchased Bitcoin over the past five months are now in a profitable position, the main risk to the current rally comes from profit-taking as these holdings flow into trading platforms. Bitfinex believes that the U.S. Treasury's announcement on August 19 to expand long-term bond buybacks is a significant factor driving the recent market movement. The initial phase of this rally was indeed fueled by short liquidations. On the same day, U.S. spot Bitcoin ETFs recorded an inflow of $297.6 million. However, the subsequent price increase was mainly driven by spot buying. From a position structure perspective, while Bitcoin's price rose by 10% to 11%, open interest (OI) increased by only about 4%, indicating that spot demand and short covering played the primary roles, with limited impact from leveraged funds. Bitfinex pointed out that the $68,000 to $69,000 range is currently a critical support level, as it is close to the average cost of buyers over the past five months. If Bitcoin remains above this level, these investors will continue to be in a profitable position, reducing the pressure of previously trapped holders selling during rebounds. In terms of capital flows, U.S. spot Bitcoin ETFs saw a single-day inflow of $606.29 million on August 20, the largest single-day inflow since May 1, with BlackRock's IBIT contributing approximately 82% of the total. Bitfinex stated that if such inflows persist for a week, it would further strengthen the market's demand structure. However, Bitfinex warned that the current biggest risk is the influx of a large amount of profitable Bitcoin into trading platforms, which could trigger the largest profit-taking event since 2026. Analysts noted that if real yields rise again to levels that previously suppressed Bitcoin below $65,000, macroeconomic factors could still quickly impact the market. [Original Link]