This week, mainstream cryptocurrencies such as Bitcoin ($BTC), Ethereum ($ETH), and Solana ($SOL) have risen slightly. Bitcoin once exceeded $66,000 this morning, and Ethereum also once exceeded $3,500. Although there have been several pullbacks in the process, the price remains strong.
However, in contrast to the price rebound, there is no "real positive news" in the current market, nor are there common catalysts. For this reason, this week's upward trend has attracted the attention and curiosity of many investors - why can the price of cryptocurrencies still rise in the case of low liquidity?
Reason for the rise: German government selling pressure was fully absorbed
Why has Bitcoin surged recently? After the Trump shooting, the market seems to have improved, but this may be just one of the reasons for the bullish trend. Blockchain data platform Glassnode believes that the main reason for the surge in Bitcoin is related to the German government.
Glassnode pointed out that the recent drop of Bitcoin to around $53,000 was largely attributed to the German government's sale of Bitcoin and the bankrupt exchange Mt.Gox's expected compensation to creditors in July.
But the good news is that the German government’s recent sale of over 48,000 Bitcoins was fully absorbed by the market in just a few weeks as Bitcoin did not fall further after falling to the above points.
US Bitcoin spot ETF has seen net inflows for several consecutive days
At the same time, the US Bitcoin spot ETF has seen net inflows for several consecutive days, easing the pressure on the Bitcoin market. Previously, Bitcoin fell below $54,000, which happened to be the average purchase cost basis of ETF holders (currently rising to $58,200) and the 200-day moving average price.
It was previously reported that from July 5 to 12, the US Bitcoin spot ETF had a cumulative inflow of more than US$1 billion. From the perspective of technical analysis, Bitcoin's return to above US$60,600 may be a good sign.
Bitcoin trading volume on exchanges drops
Glassnode also pointed out that Bitcoin trading volume (note) on major exchanges is usually an important indicator of investor interest and market liquidity, and has now declined significantly, indicating that selling pressure is decreasing.
As can be seen from the figure below, since Bitcoin hit a new high in March, transaction volume has dropped significantly, and the value is currently stable at an average of US$1.5 billion per day.
Note: Bitcoin transaction flow is the volume of transactions depositing and withdrawing Bitcoin from exchanges
The next bull market will be even crazier and last longer
Market analysts pointed out that this rebound allowed Bitcoin to successfully clear the $62,000 immediate liquidation level and convert it into a support level. From a technical point of view, in addition to the market’s expectations for positive news, the main reason supporting this week’s rebound is that buyers have the upper hand.
Analysts said that Bitcoin prices rose above the midline for the first time in four weeks. When facing heavy selling pressure between July 4 and 5 at the beginning of the month, bulls showed great resilience. Therefore, as the cryptocurrency breaks away from the sluggish trend in June and early July, more gains are expected in the coming days.
Analysts point out that the key resistance level to watch in the coming days is $66,000, and if this level is broken, Bitcoin has a high chance of rising above $72,000.
In addition, analysts also listed several major positive factors in the second half of the year, including the U.S. presidential election, increased liquidity from the U.S. Federal Reserve, and the launch of the Ethereum spot ETF.
First, the U.S. Federal Reserve has recently shown a dovish attitude, and the probability of a substantial interest rate cut before the end of the year has increased. Goldman Sachs analysts are convinced that inflation is cooling down, and judging from recent data, all macroeconomic conditions are suitable for a rate cut.
In addition, former U.S. President Donald Trump positioned himself as a "pro-cryptocurrency" candidate, and as Trump's chances of winning rose in polls and predictions, Bitcoin also benefited, with cryptocurrency-related stocks including Coinbase, MicroStrategy, Riot Platform and Marathon Digital also showing an upward trend.
Finally, according to people familiar with the matter, the U.S. Securities and Exchange Commission (SEC) will open Ethereum spot ETF for trading next Tuesday (23rd), but it has not yet been officially confirmed.
Unresolved potential selling pressure: Mt.Gox compensation
However, the Mt.Gox compensation to creditors mentioned above is still a concern for the recent Bitcoin market. Blockchain data platform Arkham pointed out that yesterday afternoon Mt.Gox continuously transferred a total of about $5.7 billion worth of Bitcoin to several unmarked wallets.
Hours later, cryptocurrency exchange Kraken said it had received a transfer of bitcoin and bitcoin cash from the Mt. Gox reorganization trustee, but no further transfers of those assets had taken place.
The actions of the Mt.Gox wallet caused Bitcoin to fall from $65,000 to $63,000 at one point, but fortunately the market quickly resumed its upward trend.
