Bitcoin Rebound May Extend as Volatility Shorts Face Squeeze
Two Prime CEO Alexander Blume said the Bitcoin rebound may have further room to run. Institutional investors that sold volatility could face increasing pressure if Bitcoin prices continue rising, potentially triggering forced buybacks and adding momentum.
Blume described the current Bitcoin market structure as healthy. Funding rates show no clear signs of overheating, while spot Bitcoin ETF inflows and corporate buying are providing fundamental support. Implied volatility has risen from about 23%-24% to above 40%, but remains low by historical standards. A squeeze among call-option sellers could accelerate Bitcoin’s upside.
Blume said Bitcoin may have formed a base near $60,000 if macroeconomic conditions remain stable. He identified a broad collapse in risk assets as the main downside risk. He also expects the Trump administration to support interest-rate cuts, while changes to the PCE inflation measure could improve the rate outlook.
In the mining sector, MARA secured a $600 million loan from Coinbase and Two Prime using its Bitcoin holdings as collateral, rather than selling the coins. This allows the miner to retain potential upside exposure. Mining companies are taking different approaches to artificial intelligence, with Cipher Mining and TeraWulf pursuing AI infrastructure more aggressively, while CleanSpark and MARA continue exploring AI and power-related opportunities alongside their core businesses.
Bullish
The news is bullish because it identifies several potential sources of buying pressure for Bitcoin. Volatility-selling institutions may need to buy back positions if prices rise, creating a gamma- or short-squeeze effect. Spot Bitcoin ETF inflows and corporate purchases also suggest demand is coming from investors beyond short-term retail speculation. Moderate funding rates reduce the immediate risk of an overheated leveraged market.
The reported $600 million MARA financing is also constructive for Bitcoin supply dynamics. By borrowing against its holdings instead of selling BTC, MARA reduces potential miner selling pressure and maintains exposure to a future price increase. Similar financing decisions by miners have previously been interpreted as confidence in longer-term Bitcoin prices, although they also increase balance-sheet and liquidation risks.
In the short term, a move above key technical resistance could force option sellers and leveraged shorts to cover, amplifying volatility and upside momentum. However, the rise in implied volatility above 40% means hedging costs are increasing, and traders should expect larger price swings rather than a smooth rally.
Over the longer term, the outlook depends heavily on macroeconomic conditions, interest-rate expectations and risk-asset performance. A broad equity or liquidity shock could invalidate the bullish setup. The analysis is therefore supportive of Bitcoin, but it is not confirmation of a guaranteed breakout.