Bitcoin (BTC USD) has set a new all-time high by exceeding $118,000 after a surge of over 9% this week. The primary factors contributing to this sharp increase are discussed in the article.
Supply and Demand
The recent surge may have been triggered by a supply shock. Despite many Bitcoin holders being in profit, selling pressure remained weak. CryptoQuant data shows that exchange reserves dipped below 2.4 million coins. This indicates a situation where demand outstrips supply.
Whale Activity
Throughout the week, whale addresses demonstrated sell-off in the spot market but simultaneously began to aggressively accumulate Bitcoin in the derivatives segment. This was confirmed by significant outflows of revenue from exchanges, especially on Binance and Coinbase. However, a recent CryptoQuant analysis suggested strong whale activity on Binance with a sharp increase in purchase volumes.
ETF Liquidity Inflows
Institutions also contributed to the recent Bitcoin rally. In the last 30 days, Bitcoin ETFs showed positive inflows, recording a stunning $1.17 billion on July 10, which is the highest inflow ever recorded in a single day. Among all ETFs, BlackRock's Bitcoin ETF saw the highest increase with $448.5 million. This sudden shift in sentiment may also have been influenced by news of Jerome Powell stepping down as SEC chairman.
The uncertainty surrounding Bitcoin's future persists despite the current optimism. Increased profit-taking from whales and the formation of a bearish divergence could signal a potential short-term correction.
